A threat to consumer protection
Melvin B. Miller | 1/4/2018, 6 a.m.
Celebration for the new year is usually a festive occasion, but sometimes serious situations require special attention. Recent events indicate that people should no longer blindly regard banks as more than somewhat secure depositary institutions.
When banks were failing during the Great Depression, President Roosevelt established the Federal Deposit Insurance Corporation to protect depositors’ funds even if the bank folded. In 1933 the FDIC secured only $5,000 of deposits, but now the coverage has been increased to $250,000.
FDIC insurance has elevated the status and public confidence in the integrity of major banks. Unfortunately, recent events have raised questions about trusting even prominent bankers. In 2017 Wells Fargo was penalized for establishing special accounts for depositors without their authority, and charging fees for default. And Citibank was found to provide advice on stocks for small investment accounts while offering different evaluations for corporate clients. No one is jailed for fraud.
America is becoming a predatory nation. The Consumer Financial Protection Bureau, which was established with the effort of Sen. Elizabeth Warren, provides the primary oversight for small investors and the working class. Donald Trump plans to vitiate the effectiveness of the bureau. Everyone must resolve to prevent that from happening.