In the Age of Laissez Faire regulation, the ground is shifting under consumers. Here’s what it means.


If the recent news from Washington isn’t a little unsettling, maybe you should look again. A new administration has brought some unconventional thinking to the Oval Office, and the repercussions could be felt for years by American consumers.

Among the changes:

  • An executive order that whenever an executive department or agency publicly proposes a new regulation it will identify at least two existing regulations to be repealed.
  • The appointment of cabinet members and agency heads openly hostile to government regulation, notably Federal Communications Commission Chairman Ajit Pai, who rescinded a plan to regulate cable TV set-top boxes.
  • Heads of industry have been meeting with the new president and his cabinet members, and the signs are alarming. In one recent meeting with business leaders, the president vowed “We’re gonna be cutting regulation massively.”

It doesn’t matter how you voted in the last election, or if you voted at all. These actions are bound to affect you. The question is: where, when and how?

“The industries that are likely to deregulate faster — where consumers will also notice — are the healthcare and financial sectors,” says Suryadipta Roy, and associate professor of economics at High Point University.

The financial industry has already felt some of the deregulatory effects, notably through an executive order that scaled back some of the financial reforms of the Obama administration. But it’s just the beginning.

“The deregulation will likely relax financial oversight that is carried out under the Dodd-Frank Reform Act,” says Roy. “In the short run, this kind of deregulation is likely to shore up share prices for banking stocks. The potential downside to this piece of legislation is that it can lead to [a] repeat of the mistakes that aggravated the 2008 financial crisis.”

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Another area of deregulation: Relaxing the fiduciary rule that requires financial professionals to put their clients’ interests first when giving advice on retirement investments. Roy says this might lead the asset managers toward excessive risk-taking by driving uninformed clients toward high-risk assets without proper understanding of the risks.

Those are hardly on only industries that will be affected, say experts. The energy sector faces massive deregulation, and some see that as a good thing.


“‘Deregulation of [the] energy sector will help the country achieve complete independence from foreign sources of oil,” says Prabir Chetia, who heads the business and research advisory department for Aranca, a research firm. “America will be able to tap the untapped energy — $50 trillion in shale energy, oil reserves and natural gas on federal lands, in addition to hundreds of years of coal energy reserves.”

That will lead to lower energy prices, he predicts.

Chetia also expects the Food and Drug Administration to face significant deregulation, which would bring in new ways to vet drugs before commercial roll-out. “One idea is vetting new drugs through consumer reviews of medications,” he says. But, he adds, it could easily backfire, potentially exposing patients to ineffective and potentially dangerous drugs.

“It could be catastrophic,” he says.

Perhaps the biggest impact will be felt by customers of financial institutions as the Consumer Financial Protection Bureau (CFPB) is reformed, or possibly eliminated. As a reminder, the CFPB is tasked with administering important federal statutes, including the Truth in Lending Act, Fair Credit Reporting Act, Real Estate Settlement Procedures Act, Equal Credit Opportunity Act, Home Mortgage Disclosure Act, and the Electronic Fund Transfer Act, as well as new responsibilities for consumer financial protection.

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“It’s a difficult argument to lessen the strength of a governmental entity looking out for consumers,” says Braden Perry, a litigation, regulatory and government investigations attorney with Kennyhertz Perry, a law firm in Kansas City. “But it may happen.”

Perry predicts the underlying protections will either be redistributed to other agencies or the single-director CFPB will be replaced with a commission-style agency with congressional oversight.

“But the CFPB is facing a serious reshaping,” he says.

Bottom line for consumers: The age of laissez faire deregulation has begun. During this time, you won’t be able to turn to the government for help. You’ll have to be more vigilant than ever — and you’ll have to expect the worst as a consumer.

If you tilt to the right politically, all this talk of deregulation may make your day. But the ramifications for consumers could be serious, and the negatives will almost certainly outweigh the positives, if the predictions are true. If the regulations go out the window, then ordinary consumers will lose an important ally with the power to create and maintain a fair, competitive marketplace.

You don’t have to be a political activist to shudder at the thought of credit cards with gotcha fees and confiscatory interest rates, of financial advisers working to enrich themselves instead of helping their customers, of drugs not properly vetted and of federal lands being drilled for oil. You just have to be a concerned citizen.


Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org.

  • fshaff

    We are doomed!

  • Jenny Zopa

    FYI, Kennyhertz Perry law firm represents payday lenders and is likely actively advocating for the reduction of CFPB oversight powers.

  • Alan Gore

    One area that is ripe for deregulation is laws passed at the behest of corporate lobbyists to suit themselves. Economists call this behavior ‘rent seeking’.

    Examples are the airlines being protected by cabotage raw from foreign competition and medallion cab companies that get away with lousy service because their city makes it illegal to compete with them.

  • disqus_00YDCZxqDV

    Big companies love regulation and in fact sponsor it themselves because it raises the barrier to entry and snuffs out unwelcome competition before it can get its boots on !

  • cscasi

    Good Article, with lots of could be’s maybe’s and perhaps. The truth is, the majority so far has been all talk. We have to wait and see what happens. I do believe that some of the things mentioned may not be good for certain consumers while others may well benefit the vast majority of us. At this point in time, it is just mainly a guessing game.

  • cscasi

    I hate the payday lenders and their high rates. Yes, many of their customers are those who live payday to payday and still can’t make ends meet, or they have an unexpected emergency and go there to get money at high rates. However, there are those who go to these places to get money for things they really do not need or really cannot afford but they think they want them anyway. Those are the folks I do not feel sorry for. That is mainly because their credit scores are low (for whatever reason(s)), they do not meet minimum income requirements or perhaps job longevity and therefore cannot get a bank loan.
    Still, I am sure the government could keep some of the good things the CFPB does on the books; if only it will.

  • PsyGuy

    Look at the stuff that has already been done, the travel ban for instance, the wall. Lot’s of things that the Drump campaign said they would do, they are doing, they weren’t kidding.

  • PsyGuy

    Isn’t Ubber looking for a new CEO?

  • michael anthony

    It’s as if the new administration acts, without thought. Like today’s travel ban on electronics in the cabin in certain mideast carriers. They are told to put in checked bags.

    Just last week, TSA asked “do you have any battery powered devices in your checked bag?”. At least twice a month, a device spontaneously erupts in flames. Cabin crew know what to do. But if it’s in cargo hold? DANGEROUS! Secondly, if u do want to cause harm, you just choose another carrier and city. And third, many of these carriers want to expand on US, Canada and South America.

    Is this all coincidence? Ha! But I’m very concerned about cargo fires. In recent yrars, 2 747 cargo planes crashed after li-on battery fires.

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