J.P. Morgan Chase & Co. Mess is Latest Example of Urgent Need for Consumer Protection
HARTFORD, Jan. 21 – Six months after Wall Street reform legislation creating the new Consumer Financial Protection Bureau (CFPB) was signed, a leading coalition released Halfway to the CFPB: An AFR Progress Report on “Standing Up” the New Consumer Financial Protection Bureau.
“This week’s latest financial fiasco, with J.P Morgan Chase caught overcharging military families for their mortgages and even wrongfully foreclosing on some, is another firm reminder of the urgent need for a strong Consumer Financial Protection Bureau,” said ConnPIRG’s Federal Consumer Program Director Ed Mierzwinski. “We look forward to July 21, when the CFPB turns on the lights and sets out to do its only job – protecting consumers from unfair practices by banks and non-banks.”
U.S. PIRG is a founding member of Americans for Financial Reform (AFR), the diverse coalition that fought for passage of Wall Street reform last summer. Today, the coalition released “AFR Progress Report: Halfway to the CFPB.” Its highlights:
– The CFPB Implementation Team, led by Professor Elizabeth Warren, has put in place critical leadership, including several state enforcement officials. One reason that current federal bank regulators failed to notice the predatory lending crisis was their rejection of state attorney general authority over national bank practices. However, the hires also include staff with diverse backgrounds, including bank and federal regulator experience.
– The CFPB has made progress in building critical complaint-handling and Internet systems to communicate with the public Its website is expected to be up within weeks.
– CFPB is expected to announce plans for simplified consumer credit card and mortgage contracts in the next few months and to propose several critical rules for comment this spring, so that they can be considered and implemented after the agency gains full authority in July.
– Professor Elizabeth Warren and key aides, including Holly Petraeus, new head of CFPB’s Office of Servicemember Affairs, are regularly on the road talking and listening to consumers, as well as bankers.
While marking its progress, the report also found that the CFPB faces numerous challenges, from the need to hire or transfer and house nearly a thousand employees to the need to nominate and confirm a permanent director by July 21.
“With the achievement of each new milestone, the administration shows that it is making real progress toward building the Consumer Financial Protection Bureau,” concluded Mierzwinski. “While there are still challenges and lurking threats from opponents and special-interests, we are confident that the CFPB is getting ready for action.”