Most people told us it couldn’t be done. Despite the well-documented evidence that unregulated Wall Street and other lender practices triggered the spectacular 2008 world-wide economic collapse, pundits and observers in Washington predicted that Wall Street’s powerful lobby would swat back any proposed reforms. In July 2010, however, President Barack Obama signed the comprehensive Dodd-Frank Wall Street Reform and Consumer Protection Act. A centerpiece of the new law was its establishment of the nation’s first agency with one job, protecting financial consumers. The Consumer Financial Protection Bureau (CFPB) was and is vehemently opposed by the nation’s bankers, mortgage companies and others, including the payday and other predatory non-bank lenders over which it was granted tools to rein in.
And while unrepentant opponents of reform continue to seek rollbacks and revisions to the Dodd-Frank Act — including outright repeal of the CFPB — what they said couldn’t be done was accomplished. The CFPB was created. Further, it was built tough, and given powerful tools we asked for to protect America’s consumers.
How did that happen? How did public interest groups beat Wall Street, the most powerful lobby around?
Two academics, Professor Robert Mayer and Larry Kirsch, now explain the story in their new book “Financial Justice: The People’s Campaign To Stop Lender Abuse.” It is available at Amazon and Barnes and Noble, but check local independent bookstores first. The book chronicles the beginnings of and then the challenges faced by the PIRG-backed coalition Americans for Financial Reform, which stood its ground alongside Professor Elizabeth Warren, Rep. Barney Frank (MA), Sen. Chris Dodd (CT), Illinois Attorney General Lisa Madigan and other reform champions to win not only the creation of the CFPB but a variety of other tough reforms over the financial industry.
The book digs deeply into some of the dramatic turning points in the fight for the CFPB and also has a chapter devoted to Elizabth Warren’s role as a “policy entrepreneur.” After all, Warren not only developed the idea for the CFPB in a small policy journal, but as the book points out, she then did something that isn’t too common: she helped make it into a law just three short years later. The meticulously footnoted book also has a forward by Barney Frank and its afterward is based on an interview between the oral historian, professor Norm Silber, and Elizabeth Warren.
“Financial Justice” explains the strategic decisions and policy choices that AFR had to make to preserve and pass the strongest reforms possible. It has lessons for all activists seeking to fight city hall or evil empires. In full disclosure, the book includes interviews with numerous AFR members and leaders, including me and my then-U.S. PIRG colleague Gary Kalman, who is now with our AFR allies at the Center for Responsible Lending.
When U.S. PIRG worked with SEIU, the AFL-CIO and others to urge the need for a broad coalition, I often borrowed Ben Franklin’s line during the Declaration of Independence drafting session negotiations that “We must indeed all hang together or, most assuredly, we will all hang separately.”
As Mayer and Kirsch correctly describe, AFR — a unique coalition of consumer, civil rights, labor, senior and other organizations — indeed did “hang” together to defeat the American Bankers Association, the U.S. Chamber of Commerce and a host of other pro-industry lobbies to enact the new law.
Of course, AFR continues to lead the fight against all rollbacks of the Dodd-Frank Act. We are working to protect all of Dodd-Frank, from its provisions to prevent bank bailouts and rein in risky derivatives practices in the securities markets to its requirements to disclose grotesquely excessive executive compensation to shareholders. Yet, the battle for the very existence of the CFPB remains an intense focus. In July, we expect a Senate floor vote on the confirmation of CFPB director Richard Cordray to a full term. Opponents? They demand that the agency be gutted as a condition of his approval, while begrudgingly admitting he is extremely well-qualified.
We’re hanging together against those powerful special interests. The fight for financial justice demands eternal vigilance.
Senior Director, Federal Consumer Program, PIRG
Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.