Sam Levine is former director of the Federal Trade Commission’s Bureau of Consumer Protection. Seth Frotman is former general counsel and senior adviser to the director of the Consumer Financial Protection Bureau. They are based in Washington, D.C.
It will come as no surprise to Syracuse that the global financial crisis did not begin with the collapse of Lehman Brothers, or with the meltdown in the stock market. It began house by house, mortgage by subprime mortgage, pushed by lenders who knew these loans would fail. And it began with the federal government turning a blind eye to this slow-motion crisis, actively encouraging subprime lending until it was too late.
We do not know if another crash is coming, but the warning signs are there. And instead of strengthening the guardrails, the Trump administration is taking a wrecking ball to them. The Consumer Financial Protection Bureau — created after the last crash to stop predatory lending before it spirals out of control — is under siege. The federal government is rolling back enforcement, defunding key agencies and making it easier for corporate giants to scam consumers…