The Consumer Financial Protection Bureau celebrated its 10th birthday last Wednesday. It begins its second decade refocused on its mission of protecting you and me after a few years of, ironically, championing shady business practices over consumers. The agency’s first decade was full of success, setbacks, and promise.
How the CFPB has protected consumers
The CFPB has prosecuted enforcement actions against nearly 300 companies over its lifespan. Some of the most notorious cases involved Wells Fargo, for creating more than two million unauthorized customer accounts; the major credit bureaus —Equifax, Experian, and TransUnion — for deceiving consumers about credit scores they sold; and Navient, for illegally cheating student loan borrowers out of repayment rights.
The Bureau learned about many problems with these companies and others through its public Consumer Complaint Database, which has published 2.2 million complaints. The CFPB has recouped $14.4 billion in consumer relief, including money returned, principals reduced and debts cancelled. The agency’s efficacy and resiliency are remarkable given the efforts to defund and defang it and to undermine its mission — sometimes by its own leaders.
How the CFPB was born and survived attacks
The CFPB opened on July 21, 2011, one year after President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, aka “Dodd-Frank” or “Wall Street Reform.” This law created the CFPB after unscrupulous businesses drove millions of Americans down the road to ruin in the late 2000s.
The CFPB became the United States’ first federal agency dedicated to protecting consumers from financial shenanigans. The creation of the CFPB was a necessary — and hard-won — victory for consumers.
Although President Donald Trump signed bipartisan legislation rolling back some Wall Street Reform protections in 2018, the CFPB’s popular mandate emerged unscathed. So, even after years of regressive decisions by the Trump Administration, the Consumer Bureau still has all its consumer protection tools intact.
How the CFPB is returning to its mission
The CFPB has been busy since former Director Kathy Kraninger resigned on Inauguration Day at the request of President Joe Biden, who replaced her with Acting Director Dave Uejio.
A new report by PIRG lists 39 actions announced by the CFPB under Uejio from January 20 through June 30, including new rules that help ensure borrowers have time before foreclosure to explore options such as modifying their loans or selling their homes.
Four of those actions reversed or delayed detrimental decisions by the previous leadership. They include resuming supervision of companies’ compliance with the Military Lending Act and delaying implementation of two rules that permit debt collectors to harass consumers and collect debts that have passed their statute of limitations.
Acting Director Uejio has done an admirable job. Now, it’s time for President Biden’s nominee, Federal Trade Commissioner Rohit Chopra, to take over. He has the ideal background to not only get the CFPB back on track but also to take it farther than before. Chopra helped build the agency, served as its first student loan ombudsman, and has used all policy levers available to protect consumers throughout his government service
How the CFPB should seize the moment
Credit reporting problems warrant immediate attention. After all, the top issue in the CFPB’s complaint database from consumers is mistakes on credit reports. According to its Supervisory Highlights report published in June 2021, the CFPB’s examiners recurrently find information on credit reports from unreliable sources.
But that’s not all. Too many Americans are dealing with predatory lending, debt collection practices, overdraft fees and other unscrupulous business practices.
Like many birthdays, the CFPB’s tenth is a great time for a fresh start. Consumers with financial burdens exacerbated by shady companies deserve a fresh start too. For the first time in years, the CFPB now has both the will and the means to make that happen.
Director, Consumer Campaign, PIRG
Mike directs U.S. PIRG’s national campaign to protect consumers on Wall Street and in the financial marketplace by defending the Consumer Financial Protection Bureau, and works for stronger privacy protections and corporate accountability in the wake of the Equifax data breach. Mike lives in Washington, D.C.