Chapter 1: What recent changes have occurred with the Consumer Financial Protection Bureau?
The latest on the economics of the war. From Marketplace, I'm Sabri Beneshour, in for David Brancaccio. President Trump asked allies to send ships to help reopen the Strait of Hormuz. Several have declined to get involved. Meanwhile, the price of oil is still about 50% higher than it was a month ago. Ken Watret is here to talk about it. He's a vice president at S&P Global Market Intelligence.
Ken, good morning. Good morning. So the price of a barrel of Brent crude is about 50% higher than it was a month ago. Gallon of gas is $3.79. That's up 40% from a month ago. What is your prediction of where this is going to go? Well, it's highly sensitive to developments in the Middle East, obviously. We have a series of scenarios which we're looking at.
The base case, which informs our current forecasts, is that we'll see limited disruption, which lasts a little longer and then starts to ease as we move into April, and energy prices will come down. But the uncertainty surrounding that assumption is obviously very high, and there are scenarios which unfortunately will result in persistently high energy prices for much longer. U.S.
diesel fuel is now above $5 a gallon for the first time since December of 2022.
Chapter 2: How have credit bureaus responded to consumer complaints?
Diesel is very important because it goes into trucks and ships and buses and all the things that do the things in the economy. How significant of an inflation mover is that? Well, it's very important in a number of respects. Obviously, it has a direct impact on the consumer price inflation rate. And then there's the indirect effect of higher energy prices.
They pass through into the cost of production of other goods. There's the cost of transport, which is another source of input costs. And then there's the second round effects, as economists call them, which is the potential for persistent higher inflation rates to then feed into inflation expectations and then wage and unit labor cost growth. I wanted to ask you about that.
You know, the Federal Reserve is deliberating today and tomorrow on what exactly to do with interest rates in the current circumstances. If inflation is being driven by higher fuel costs, what is the point of having higher interest rates? Like what can higher interest rates do about that kind of inflation?
We need to bear in mind that after the problems following Russia's invasion of Ukraine in early 2022, central banks and advanced economies were very slow to react to the rise in inflation, and they probably think that that was an error with the benefit of hindsight. I think on this occasion, they would be much more likely to react more quickly if we saw those broader-based inflation pressures.
Ken Wattret, Vice President of Global Economics at S&P Global Market Intelligence, thank you so much. Thank you. ¶¶ Late last week, a federal judge blocked the Trump administration from cutting off funding for the Consumer Financial Protection Bureau. This is the government watchdog agency created after the Great Recession.
The administration has been trying to basically gut the agency of staff and money.
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Chapter 3: What impact do rising oil prices have on inflation?
And that effort has already started to have consequences for consumers, according to a new investigation by ProPublica. Joel Jacobs is a data reporter there who wrote all about it. Hi, Joel. Thank you for having me. So you start the piece with this story of this Colorado accountant, this woman, Rebecca Shepard.
She finds a huge mistake on her credit report, $240,000 in student loan debt that is not her debt. Her credit score plunges. She tries to get the three credit reporting companies to fix this. What happens? First, she tries to go to the credit bureaus directly, and then she's basically rebuffed. Then she tried to go through the CFPB's complaint system.
And the company, in this case, the credit bureaus, the big three, Equifax, TransUnion, and Experian, you know, they're required to give a response within 60 days. But in her case, and in many other cases, it did not resolve her issues. And she even actually disputed a fourth time via certified mail. And in that case, the response she got from TransUnion was,
a postcard in the mail saying they didn't think the dispute came from her. This is part of a bigger pattern that you found, yeah? It's not very transparent what happens when you go directly to a credit bureau. They don't release public statistics on how often they fix a credit report in response to a direct dispute. But we do have some data when somebody does go through the CFPB and complains.
And so that's what we looked at, right? And we saw that basically two of the three banks big credit bureaus, that would be Experian and TransUnion, they really substantially dialed back how often they provide relief, which is sort of a term in theory that means, you know, they made some kind of change to someone's credit report in response to a complaint.
What do the credit bureaus say when you bring this up with them? Right.
So the credit bureaus really say that the complaint system and potentially their disputes as well are flooded with third party credit repair firms, you know, many illegitimate complaints, people listening to social media influencers online and trying to contest everything that's on their credit report that's negative, even if it's accurate.
And, you know, while those third party complaints certainly do exist and bad actors do exist in the credit repair space, they are potentially labeling some of these, you know, more legitimate complaints also as coming from third parties. What about the CFPB? What did they tell you about their enforcement and oversight?
A spokesperson did say that basically the complaint system was being flooded with bot submissions and that their efforts are basically focused on trying to clear that out so that legitimate consumers can get help. I will say, though, at the same time, the CFPB is fighting in court for basically the right to fire 90% of its employees.
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