MarketWatch, a source I generally like for quick, accurate summaries of what’s going on in markets, has a strange and unsettling commentary up today about a settlement between Discover Financial Services and federal bank regulators.
The investigation was started by the Federal Deposit Insurance Corporation and later joined by the Consumer Financial Protection Bureau. From their press release:
The joint investigation concerned deceptive telemarketing and sales tactics used by Discover to mislead consumers into paying for various credit card “add-on products” – payment protection, credit score tracking, identity theft protection, and wallet protection.
Discover’s telemarketing scripts contained misleading language likely to deceive consumers about whether they were actually purchasing a product. Discover’s telemarketers also often downplayed key terms and spoke quickly during the part of the call in which the prices and terms of the add-on products were disclosed.
Here’s where the MarketWatch commentary takes this, with my bold:
Not to dismiss the FDIC, but the CFPB under Richard Cordray is clearly the driving force behind these investigations and settlements. Which is exactly why the banks fought so hard against the creation of the agency.
It doesn’t matter if Discover, American Express or Capital One really engaged in deceptive practices. In cases such as these it’s often easier and cheaper to not fight city hall.
OK…deep breath. Not sure why, other than the fact that the R’s have been gunning for it ever since it was born, the CFPB is the bad guy here. The FDIC brought the case.
But why, oh why doesn’t it matter if banks deceive and defraud!? After all we’ve been through with the housing bubble and the financial crisis and the banks betting against their customers and hundreds of billions in bailouts, how can that not matter?
It’s just an extremely potent reminder of the mindset among those who used to argue that financial institutions can police themselves, and now argue that the financial reform bill that created the CFPB must go. They just don’t think it matters.