Now, more than ever, strong consumer protections are critically needed. Americans have taken on more debt than at any time since the beginning of the recession in 2008. Predatory lending and debt-collection lawsuits are disproportionately directed at our communities of color, raising civil rights issues that are exacerbated by the dramatic wealth gaps across racial lines. Lawsuits and other predatory tactics by debt collectors often lead to disastrous consequences for low-income families, including wages being garnished, bank accounts frozen and drained, credit reports (and thus future employment and housing prospects) impaired, and driver’s licenses suspended. But one year into the Trump administration, protections for vulnerable Americans are under siege.
President Trump named Mick Mulvaney acting head of the U.S. Consumer Financial Protection Bureau (CFPB), which, through its work policing abuses by the financial services industry, has returned nearly $12 billion to American families since 2010. Mulvaney has trashed the CFPB’s existence as a “sad, sick joke,” stripped enforcement powers from a CFPB unit responsible for pursuing discrimination cases, and recently announced that he is seeking a second-quarter 2018 CFPB budget of zero dollars. He has also sought to roll back the CFPB’s focus on data-based decision making; after the CFPB had begun a national survey that would have helped determine how to make notices of debt collection effective, he ordered a withdrawal of the survey. As for enforcement, the CFPB recently dropped a suit against payday lenders that allegedly tricked low-income people into taking on loans with 950 percent interest rates, and announced that it will no longer be “pushing the envelope” to protect American consumers. Indeed.
Meanwhile, the Department of Education, under Secretary Betsy DeVos, has withdrawn policies previously issued by the Department to strengthen consumer protections for student loan borrowers. These protections matter. Over 44 million Americans have student debt, with a staggering aggregate total of over $1.4 trillion. This, too, raises serious civil rights and equity issues; a recent study concluded that four years after earning a bachelor’s degree, our country’s African-American college graduates have nearly $25,000 more student loan debt than their white peers.
And at the Department of Homeland Security, arrests at courthouses by immigration enforcement agents have spiked dramatically. According to the Immigrant Defense Project, the number has increased by 900 percent in New York State in 2017. These problems are evident in the DC area as well, as documented by CASA of Baltimore, and as seen in ICE arrests at courthouses in Northern Virginia. In this climate of fear, immigrant families are understandably anxious about appearing in court, and many suffer default judgments in civil debt cases where they have been sued because they are too anxious to appear in court to defend their interests in the case.
Amidst this siege, what can be done?
First, we should continue state-level efforts to step into the breach. DC Attorney General Karl Racine, as well as his counterparts Brian Frosh in Maryland and Mark Herring in Virginia, have implemented robust consumer protection programs, and it is critical they receive continued resources and authority for this work.
Second, the private non-profit sector must continue to respond to represent individuals and ensure preventive education efforts are developed, especially for immigrant communities. Our nonprofit organization, Tzedek DC, is the first local group to focus principally on safeguarding the rights of low-income families facing debt-related crises. We are, for example, in partnership with the Hispanic Bar Association of DC, working to get “know your rights” materials to immigrant families facing debt-related lawsuits so that they know they may be able to send a lawyer representing them to the courthouse in civil cases to safeguard their rights, without having to experience the anxiety of being at the courthouse and worrying about immigration agents. Important consumer work is also being done by our sister nonprofit organizations in the DMV area.
Finally, we should continue to fight at the federal level. Until the federal domestic policy climate improves, however, it remains incumbent on state and private efforts to continue to step up. We must ensure protection of our most vulnerable neighbors.
As the Book of Deuteronomy teaches us: “Justice, justice, shall you pursue.”
By Ariel Levinson-Waldman
Ariel Levinson-Waldman is the founding president and director-counsel of Tzedek DC, a nonprofit organization that provides free legal help to low-income families of all faiths and backgrounds facing debt-related crises. Tzedek DC is a strategic partner of the Jewish Community Relations Council of Greater Washington.