The government protects us from some dangerous products, but not from others that, over time, ruin countless lives.
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Explicit content warning
04/09/19 • 45 min
18 Listeners
Against the Rules with Michael Lewis - The Seven Minute Rule
Transcript Summary
In the podcast episode titled "The Seven Minute Rule," Elizabeth Warren discusses the pressing issue of student loans and the lack of regulation in the consumer finance industry. She advocates for the creation of a government agency, the Consumer Financial Protection Bureau (CFPB), to protect consumers from harmful practices. The episode explores the challenges faced by service members and students in dealing with financial firms, as well as the actions taken by the CFPB against fraudulent companies. It also delves into the personal hardships faced by individuals affected by the consumer finance industry, including identity theft and the burden placed on innocent victims. Through personal stories and examples, this episode sheds light on the problematic nature of the student loan servicing industry and emphasizes the need for increased regulation to protect consumers. If you're interested in understanding the impact of consumer finance and advocating for better protection for borrowers, this episode is a must-listen.
Transcript
Pushkin. I live in Berkeley, California. It's a peaceful place for an American city. In twenty years, I've never so much as noticed the police station. Never occurred to me that I even needed to know where it was. So it's Joe, yes, Zoe. But now here I am inside the place, surrounded by cinder block walls and pictures of legendary police officers, and across the table from me there's a living legend officer, Joe LaDou. So I'm going to tell you wha
The Seven Minute Rule Top Questions Answered
How does accepting forbearance for years impact loan repayment?
Accepting forbearance for years can lead to increased loan amounts and complications in repayment.
What is the role of the Consumer Products Safety Commission?
The Consumer Products Safety Commission exists as a referee to protect consumers from dangerous products.
What fatal flaws can financial products like student loans have?
Financial products like student loans can have fatal flaws that only experts can spot, making them more complicated and challenging to manage.
Who wanted to create a government agency to regulate consumer finance?
Elizabeth Warren wanted to create a government agency to regulate consumer finance.
What is the purpose of the Consumer Financial Protection Bureau (CFPB)?
The Consumer Financial Protection Bureau (CFPB) was created in 2010 to protect consumers and hold finance companies accountable.
What actions has the CFPB taken to protect consumers?
The CFPB has returned billions of dollars to consumers who have been ripped off and has filed lawsuits against companies engaging in predatory practices.
Why did Seth Frautman join the CFPB?
Seth Frautman joined the CFPB to help military members and later worked on student loan issues, finding the situation to be worse than expected.
What lawsuit did Seth Frautman and the CFPB file against Navian?
Seth Frautman and the CFPB filed a lawsuit against Navian for preventing certain professions from accessing a loan forgiveness program.
How has the structure of the CFPB been criticized?
The structure of the CFPB has been criticized as unaccountable and flawed.
What problems can loan servicers like Navian create?
Loan servicers like Navian have found ways to deny loan forgiveness applications, creating problems for borrowers.
How has consumer finance affected individuals and their responsibility for resolving problems?
The consumer finance industry creates problems for individuals and makes them responsible for resolving them.
How can mishandling sensitive information lead to identity theft?
Mishandling sensitive information can lead to identity theft, causing financial and emotional consequences for victims.
How did Naviant guide Katie Highland regarding her student loans?
Naviant guided Katie Highland towards deferments and kept her in that direction when she had trouble making the monthly payments.
What is the purpose of the Public Service Loan Forgiveness Program?
The Public Service Loan Forgiveness Program allows borrowers in public service jobs to have their remaining loans forgiven after making 120 on-time payments in 10 years.
What rule did Naviant have for calls with borrowers?
Naviant had a seven-minute rule for calls, with incentives for representatives who kept their calls under that time.
How did representatives at Naviant sometimes shorten call times?
Representatives at Naviant sometimes hung up on borrowers intentionally to shorten the call time.
How much was the CEO of Naviant paid in 2017?
The CEO of Naviant was paid $6.5 million in 2017.
How much student loan debt does Naviant manage?
Naviant is a major player in the student loan servicing industry, managing $300 billion in student loans.
What happened to the speaker when they were targeted for identity theft by City Group?
The speaker was falsely targeted for identity theft by City Group, leading to negative credit impact and limitations on their American Express account.
How did the speaker discover someone had opened a credit card account in their name?
The speaker discovered someone had opened a credit card account with City Bank in their name, borrowing over $16,000 without repayment.
What actions did the speaker take after being targeted for identity theft?
The speaker had to file an identity theft complaint with the Federal Trade Commission and visit the police station to file a report.
Why does the burden of dealing with identity theft fall to innocent individuals?
The speaker questions why innocent individuals have to bear the burden of dealing with the aftermath of identity theft, rather than the banks taking responsibility.
How has the financial sector placed the burden of identity theft on individuals?
The financial sector has placed the burden of identity theft onto innocent individuals, causing strain on police resources.
What impact does debt have on Katie Highland's family life?
Katie Highland's experience highlights the impact of debt on her family life, showcasing the struggles faced by individuals with student loan debt.
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