Senator Mitch McConnell (KY) told Wall Street and other bankers yesterday that “If I had my way, we wouldn’t have the [CFPB] at all.”
McConnell has been leading a group of 43 Senators — under Senate rules, a minority of 41 or more Senators can block action — who are demanding gutting changes to the Consumer Financial Protection Bureau’s funding, authority, structure and independence as their price to confirm the CFPB’s well-qualified director, Rich Cordray, to a full term.
Of course, no one has forgotten the spectacular financial collapse caused by Wall Street shenanigans and a lack of regulation. It shouldn’t be that hard to recall; it happened just five years ago and the economy is still recovering. Even Senator McConnell and his Wall Street patrons haven’t forgotten; they simply don’t like Wall Street reform. They want a return to the old unregulated days when bankers could take risks without responsibility. The result? They destroyed the lives of millions of Americans who lost jobs or homes or retirement savings or all three.
That’s why the American Bankers Association (yesterday’s venue for McConnell), the Financial Services Roundtable, the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and many, many other powerful special interests continue to attack and delay every new public protection enacted in the 2010 Wall Street Reform and Consumer Protection Act.
And while they are fighting the Volcker rule to limit risky betting by commercial banks using other peoples’ money, opposing full restitution to the homeowners that they wrongly foreclosed on (while bouncing some of the checks they actually do send them) and even challenging the extremely modest SEC rule that would require them to disclose the ratio between the pay of their CEO and their median (meaning half make more, half make less) employee , their strongest opposition is reserved for the very idea of the CFPB. What’s the CFPB? It’s our first and only federal financial agency with just one job, protecting consumers, no matter where they buy their financial products.
What are some of the protections we wouldn’t have at all, if Senator McConnell and Wall Street have their way and we didn’t have a CFPB at all?
Protections consumers wouldn’t have at all, if we didn’t have a CFPB at all: Nearly half a billion dollars in refunds from big credit card companies Capital One, Discover and American Express — all sued by the CFPB for unfair practices, including the marketing of supposedly-free useless credit card add-ons.
Protections veterans and servicemembers wouldn’t have at all, if we didn’t have a CFPB at all: A special team of advocates and investigators looking out for service members and veterans, and going after those who systematically target them with financial scams, illegally foreclose on them or hustle them into sleazy for-profit school contracts.
Protections consumers wouldn’t have at all, if we didn’t have a CFPB at all: The CFPB’s complaint system and public database of consumer complaints. The CFPB’s complaint system has been widely praised for delivering swift and serious results. In the early going, more than half of those using the system for credit-card complaints received monetary relief. The public database ensures a swift response to complaints (no company wants to be Number One on this list!) and enables academics and other researchers to probe the problems that plague financial markets and suggest priority solutions.
Protections senior citizens wouldn’t have at all, if we didn’t have a CFPB at all: An Office of Older Americans, helping them with investment choices and going after “clever scam artists or desperate family members targeting you because of your home equity or net worth.”
Protections consumers wouldn’t have at all, if we didn’t have a CFPB at all: A federal regulator with the authority to supervise (or examine) payday lenders, mortgage companies and private student lenders of any size, and, so far, also larger credit bureaus and debt collectors, with larger student loan servicing firms next on the CFPB’s radar. Being able to look inside the previously “black box” activities of these non-bank firms for possible future problems will help stop bad behavior and violations before they occur.
Protections students wouldn’t have at all, if we didn’t have a CFPB at all: First, all students wouldn’t have “Know Before You Owe” tools to help students understand and compare college costs and financial-aid offers. Second, students wouldn’t have a place to go with complaints about private education loans or for-profit school scams.
Protections consumers at risk of lending discrimination wouldn’t have at all, if we didn’t have a CFPB at all: An Office of Fair Lending to “ensure that all Americans have fair, equitable, and nondiscriminatory access to credit…[CFPB] will use every tool at our disposal to protect American consumers.”
The list goes on and on. It continues from here with major new protections for homeowners against unfair mortgage practices and even includes protections for consumers sending funds to families overseas. Find more about the protections that the CFPB provides to make markets work for both consumers and fair-dealing firms here at the Americans for Financial Reform page Ten Reasons We Need The CFPB.
I encourage readers to take a look at the CFPB’s latest Semi-Annual Report to Congress for more discussion of its accomplishments and ongoing investigations and projects. Director Cordray will present the report at an oversight hearing of the Senate Banking Committee next Tuesday, 23 April at 10am. You should be able to watch the hearing live here.
After you read the report or watch the hearing, I think you will agree that what Senator McConnell and Wall Street want — no CFPB at all — doesn’t serve the public interest, only special interests. It doesn’t serve consumers at all.
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.