New Consumer Agency Takes Over as Nation’s Consumer Cop

Industry Mounts Opposition to Bureau and Any Nominated Director

CALPIRG

San Francisco, CA – Leading consumer groups, today 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%), along with a report documenting “10 reasons” consumers need the new Consumer Financial Protection Bureau (CFPB). The Bureau will take over enforcement of all major consumer laws on Thursday, July 21.

Representatives from the California Attorney General’s office, Consumers Union, San Francisco Labor Council, Greenlining Institute, Center for Responsible Lending and the California Reinvestment Coalition, joined CALPIRG today in San Francisco’s financial district to call on the Senate to vote to confirm former Ohio Attorney General Rich Cordray as CFPB director, so that it is able to fulfill the promise of consumer financial protection.

This week President Obama nominated Rich Cordray as the CFPB’s first director.  But leading consumer groups warn that on Capitol Hill the CFPB continues to face fierce political opposition as powerful Wall Street institutions opposed the bureau and vowed to block the confirmation of any director.

“The good news is that this week, there’s a new police department to protect consumers from predatory lending and financial tricks and traps,” said Jon Fox, a consumer advocate with CALPIRG. “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.”

With the coming July 21st ‘transfer date’, the partner groups released a new poll of 800 likely voters prepared for Americans for Financial Reform, AARP and the Center for Responsible Lending. Among its highlights:

• 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.” Support is diverse as the results included over two-thirds of Republicans (70%).
• Two out of three likely voters (66%), including nearly half of Republicans (49%), 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.”

The groups also released a new report, “10 Reasons We Need the Consumer Financial Protection Bureau Now.” Among its findings:

• 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 American 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 are purchased – at banks, payday lenders or other firms.

Jon Fox said that “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.” Jon Fox added that “For nearly 2/3’s of likely American voters it is common sense that when an ordinary family goes out to get a credit card or a mortgage, they ought to be treated fairly. That’s why we need a consumer cop on the beat.”

However, 44 Senate opponents of the CFPB, led by Minority Leader Mitch McConnell (R-KY) and Richard Shelby (R-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.  In two years as Ohio Attorney General, Richard Cordray recovered over $2 billion dollars looted by Wall Street firms and returned it to Ohio families, retirees and municipalities.

“Without a director, the CFPB won’t have the clout it needs to protect consumers, and the Wall Street banks win,” Jon Fox concluded. “So while we celebrate the new consumer bureau, we also warn that the Wall Street banks that caused the economic collapse oppose the consumer bureau, oppose the President’s nominee and want to go back to business as usual. That’s what got us into this mess in the first place, and we need to stand up for consumers.”