Today, the House Appropriations Committee, at the behest of both Wall Street and predatory lenders seeking to run amok, will vote to eliminate the CFPB’s independence from the politicized appropriations process. The bill will also further hamstring the SEC, a federal financial agency that struggles to protect small investors since its funding is already subject to the committee’s whims. You can watch the debacle here at 11am ET. Wall Streeters and payday lenders will be lighting their cigars with $100 bills– chump change compared to the $1.9 million dollars/day ($1.4 billion total in this election cycle) they’ve been spending to roll back Wall Street reform.
You can read the opposition letter from Americans for Financial Reform, PIRG, Consumer Federation of America, the NAACP and other leading groups here (excerpt):
“Changing the CFPB’s independent funding would leave the CFPB more vulnerable than the Federal Reserve, the OCC, and the FDIC to industry influence, once again treating consumer financial protection as a less important matter. It would give Wall Street and the worst elements of the financial services industry endless lobbying opportunities to deny the CFPB the funding to do its job if and when the regulator took action that a sector of the industry did not like.”
Meanwhile, over at the CFPB, important work to protect consumers, including servicemembers, from unfair and predatory financial practices continues. Some recent highlights include:
- CFPB orders RPM Mortgage to refund $18 million, plus a $1 million civil penalty, for paying executives kickback rewards for illegally steering consumers into higher cost loans.
- Senator Jack Reed Proposes CFPB Provide Even Greater Protections from Financial Fraud for Servicemembers, Veterans Even As CFPB Continues To Defend Them.
- CFPB and Florida Attorney General Order Foreclosure Relief Last-Dollar Scammers to Pay $27 Million in Refunds and Penalties.
- CFPB and Department of Justice Order Provident Funding To Pay $9 Million To African-American and Hispanic Borrowers Harmed By Illegal Discrimination.
- CFPB Orders Paypal To Refund $15 Million to Consumers and Pay $10 Million Civil Penalty For Tricking Consumers Into Signing Up For Deceptively Marketed Credit Product, Then Preventing Them From Canceling.
- CFPB Alerts Student Loan Borrowers To Help for Their #StudentDebtStress.
- CFPB Orders Wireless Firms Sprint and Verizon to Refund $120 Million and Pay $38 Million In Fines for Cramming Junk Horoscope, Other Fees Onto Mobile Bills
Of course, the CFPB continues to work on other major projects that have drawn the ire of powerful special interests. WIthin a few days, expect new detailed consumer narratives (stories) to appear in the highly successful Public Consumer Complaint Database. Expect further action this year on the CFPB’s effort to rein in payday and other high-cost lenders. Expect further action on its research finding that pre-dispute mandatory arbitration clauses in financial contracts harm consumers.
But, expect further attacks on the CFPB in both the Senate and the House. Recently, freshman Senator David Perdue (GA) escalated his own over-the-top attack, alleging that the bureau was “a rogue agency that dishes out malicious financial policy” and filing a bill similarly eliminating the CFPB’s independence. (By the way, the so-called US Consumer Coalition” listed in the Perdue release is a front group for some financial industry that won’t disclose its backing.)
The American public supports the CFPB, overwhelmingly and on a bi-partisan basis. After all, the idea of the CFPB needs no defense, only more defenders. Congress needs to start listening to consumers, instead of special interests. Why should they be allowed to run amok, even as our economy struggles to recover from the recession cauased by the 2008 financial collapse triggered by “rogue” financial practices?
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.