If you are concerned that deep or prolonged inflation, a US trade war or potential recession could land you there, you may not be looking for Washington, DC for help. With news on, it’s hard to see everyone agreeing to anything, let alone a substantial consumer debt solution.
Still, there may be more general evidence than you think.
Bankrate requested interviews with 17 members of Congress, including those serving on the House Committee on Education, Workforce and Financial Services, as well as Senate committees on Banking, Housing and Urban Affairs. These efforts led to separate interviews with two House members from different coasts and political parties, 18th term MP Maxine Waters (D-CA) and two term MP Mike Lawler (R-NY).
Certainly, Waters and Lawler shared the points of discussion that lined up with the party. In other words, the Trump administration is causing great damage to democracy (Democrats) and is just beginning to implement the election-mandated agenda (Republicans). And yes, they are two voices of many voices. But, at least in their chambers, accepting them as proxies, these House members have proven that the only aspect of the consumer debt debate is the consumer’s side.
Both told us that consumer trust has reached the lows of the COVID-19 era and that they recognize that financial literacy is not tired of it. Believe it or not, at least in part, I agree with the lever that can be pulled to help members get out of the red and come out of the bystander.
Does DC understand today’s burden on consumers?
They at least grasp the frustration. During our conversation, Lawler relayed one of his members’ main concerns. The rise in interest rates is, according to his claims, about $1,000 more per month in his district).
“It’s unsustainable for most people,” says Lawler. “People need to be able to afford everyday essentials and where they live, so this is still the biggest issue we’re dealing with.”
As for Waters, she says Bankrate “is very keenly aware of Americans’ personal frustration and feels what’s going on.”
“We’re holding city hall meetings to help people understand what’s going on with the new administration and what we’re trying to do,” she says. “This law defines us and we continue to create laws to help people know what we care about, even in a chaotic situation. Everyone needs to worry. What’s going on in this country is serious.”
| Non-commortage Consumer Debt | total* | Annual increase |
| Automatic loan | $1.66 trillion | $48 billion |
| Student loan | $1.62 trillion | $14 billion |
| Credit Card | $1.21 trillion | $82 billion |
| *As of the fourth quarter of 2024 | ||
Four levers that Congress can pull to help consumers
1. legislation
If you consider another point in recent history where managing your personal finances is more complicated, you might come up with the Great Recession of 2008 or the Covid-19 pandemic. In both cases, the government intervened in the form of other relief, such as corporate or consumer stimulus packages, student loan forgiveness that targets borrowers, and payroll protection programs for small business operators.
As Lawler told Bankrates for a student loan law tracker, “Legislation takes time.” The question is whether it’s aggressive enough to overtake the next, perhaps wider consumer financial crisis (if we’re already not one).
Roller points to an ongoing budget settlement process. Republicans, among other staple foods, want to reduce taxes and restructure student loan repayments. Through reconciliation, Republican-controlled Congress may avoid relying on democratic support. Otherwise, Republicans will need to curb their ambitions and reach across the aisle.
2. CFPB Protection
When Waters, 86, joined Congress in 1991, the Consumer Financial Protection Bureau (CFPB) was still 20 years since its establishment. The CFPB was another by-product of post-cooperation law. It was established by the Dodd-Frank Act in the wake of the Great Recession.
In its first 15 years of operation, CFPB advocates for credit card users and fined lenders and loan servicers, including infamous cases involving Navient (student loans) and Wells Fargo (cars and mortgages).
However, the Trump administration’s attempt to dismantle the CFPB in its first 100 days threatens consumer protection efforts.
“Since they went up and running, they’ve done an incredible job of paying billions of dollars back to consumers,” Waters says. “So I hope that a court decision will allow them to return to work.”
Roller says that CFPB (as many institutions) could be reformed, but agrees with the valuable role it plays in reducing consumer harm.
“The CFPB could help generate the level of debt that many people have and protect consumers in order to support education within the community.
3. Funding for financial education
The Trump administration’s Department of Education overhaul is part of a major desire to hold universities and their leaders accountable, but there are droopy fruits to boost financial literacy. Consider the fact that the Financial Industry Regulatory Literacy Quiz reports a national average score of 3.3 out of 7.
As Lawler says, it might be to think of students as “not just college preparation, but also career preparation.” You might even add “preparation for life” to that line.
“One of the challenges we see within the education system is that there is sometimes a lack of financial literacy. And that’s what we have to take really seriously and fully understand what they are taking, whether people understand the level of debt they carry, whether they understand mortgages, car loans, student loans, credit card bills or whatever.”
In her district, Waters says she views registration as a more pressing issue than designing a personal financial curriculum, and perhaps more pressing than a key prequel. She explained that she would bank meetings with community college students who were concerned about their ability to stay at school.
“‘Now is not the time to drop out. Keep doing everything you can to ensure you adhere to, despite the Pell grants and all of them being at risk,” Waters recalls telling students. “The final analysis is that education is our country’s future.”
4. Leave room for personal responsibility
In itself, you may not look to the halls of Congress for personal financial advice, but that doesn’t mean they won’t be offered to you. Without sounding like a sermon, Lawler tells his members to “stay at the top” of their finances to “ensure that your debts are paid back.”
“Unlike the federal government,” he laughs, adding, “You can’t print new money.”
So, in a way, Washington asks you to do what you can’t do. The mentality of this lifting with this booth strap is shared by Rollers, Waters and, undoubtedly, many other elected officials.
And they’re not wrong. Of course, it’s helpful to be actively involved in your personal finances. In fact, it is the most immediately useful lever (of the four) to pull it, as it does not require any council actions to do so.
