New Consumer Agency Takes Over as Nation’s Consumer Bank Cop

Groups Release Report Showing “10 Reasons” We Need Consumer Protection

Arizona PIRG Education Fund

As the Consumer Financial Protection Bureau (CFPB) officially opened its door today, the Arizona PIRG Education Fund and consumer groups across the nation announced the results of a poll showing that an overwhelming majority of likely voters both support a new consumer agency (74%) and want Wall Street held “accountable” (77%).  In addition, the groups issued a report documenting “10 reasons” consumers need the new CFPB. 

This week the President nominated former Ohio Attorney General Rich Cordray as the CFPB’s first director.  But leading consumer groups warn that on Capitol Hill the CFPB continued to face fierce political opposition as “powerful Wall Street banks” opposed the bureau and vowed to block the confirmation of any director.

“The good news is the establishment of a new police department to protect consumers from financial tricks and traps,” said Diane E. Brown, Executive Director of the Arizona PIRG Education Fund. “The bad news is that Wall Street banks have asked their friends in Congress to defund and defang the bureau by denying it a director.” 

Highlights from a new poll of 800 likely voters prepared for AARP, Americans for Financial Reform, and the Center for Responsible Lending include:

• •    Nearly three-quarters (74%) of all likely voters support a “single agency with the single mission of protecting consumers” from unfair financial practices.
• •    Three-quarters of all likely voters (77%) want Wall Street held “accountable.”
• •    Two out of three likely voters (66%) agreed that “We cannot get our economy back on track without strong financial reform.” Less than one-quarter (23%) agreed with the statement “The so-called Wall Street reform law is a job killer.”

Findings from a new report “10 Reasons We Need the Consumer Financial Protection Bureau Now” include:

• •    The report documents that while the failure of federal regulators to prevent predatory mortgage lending is well known, it is less well-known that federal regulators also failed to stop unfair credit card tricks, overdraft fee schemes and the growth of triple-digit APR and payday loans, which are now imposing a crushing financial burden on many families.
• •    The report’s documents that these failures lead to the conclusion that consumer protection should be housed in one agency with just one job, protecting consumers from unsafe financial products, no matter where they buy them, at banks, payday lenders or other firms.

Brown said, “The greed of the Wall Street banks and regulatory failures caused a financial collapse that left millions without work, millions more without homes and the rest of us losing trillions of dollars in home values and retirement income.”

However, 44 Senate opponents of the CFPB, led by Majority Leader Mitch McConnell (KY) and Richard Shelby (AL), have sent the president a letter threatening to block “any” nominee to head the bureau unless its powers are rolled back and its funding weakened – in spite of Richard Cordray’s qualifications as a ‘tough sheriff’.  In two years as Ohio Attorney General, Cordray recovered over $2 billion dollars wrongly looted by Wall Street firms and returned it to Ohio families, retirees and municipalities.

Legislation is expected on the U.S. House floor as early as this week to gut the CFPB’s authority and eliminate its director, replacing the position with a politicized 5-member commission.

“Without a director, the CFPB will not have the clout it needs to protect consumers,” Brown concluded. “While we celebrate the new consumer bureau, we also warn that the Wall Street banks that caused the economic collapse oppose the consumer bureau and want to go back to business as usual which we cannot let happen.”