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This week, on July 21, the Consumer Financial Protection Bureau turns 5 years old. The CFPB, a brainchild of then-professor Elizabeth Warren, was championed by U.S. PIRG and Americans for Financial Reform (AFR), a PIRG-backed coalition of civil rights and community groups, as part of Wall Street Reform legislation enacted in the wake of the 2008 financial collapse triggered by risky bank practices.
U.S. PIRG warned, however, that the successful bureau, the first federal financial agency with only one job, protecting consumers, faces continued threats.
“Despite, or maybe because of, the CFPB’s successes in cleaning up the financial marketplace, powerful special interests from the big banks to the payday lenders and debt collectors all want to weaken its ability to protect consumers from the tawdry practices that unfairly take hard-earned money from our wallets,” said Ed Mierzwinski, Consumer Program Director of U.S. PIRG.
U.S. PIRG also released “The Story of the CFPB,” a 1-minute animated video, in celebration of its birthday.
Some highlights of the CFPB’s successes in its first five years:
- The bureau has recovered and sent back nearly $12 Billion for 27 million consumers harmed by illegal practices of credit card companies, banks, debt collectors, mortgage companies and others.
- The bureau has received nearly one million consumer complaints and published, so far, nearly 600,000 of these in a searchable public database.
- The bureau has finalized a variety of new rules to protect consumers, such as in the mortgage marketplace. It is in the process of finalizing two critical new rules now open to public comment: (1) A proposed high cost small-dollar lending rule, if strengthened, would prevent consumers from being caught in the debt traps of payday and auto title lending. [U.S. PIRG’s page for you to send a comment letter to the CFPB is here.] (2) A proposed rule limiting the language in mandatory arbitration clauses in common “take-it-or-leave-it” financial contracts would prohibit companies from using arbitration clauses to deny consumers the right to band together in class actions to have their day in court. (3) This month, the bureau also announced the first steps in developing a rule to protect consumers from unfair debt collection practices.
- The bureau has special offices to protect students, seniors, servicemembers and persons at risk of unlawful discrimination.
- It has issued numerous education and financial literacy materials, including “Know Before You Owe” guides for buying a home or taking out college loans; it also has a variety of guides and programs for caregivers, legal services offices, social services agencies and librarians. Learn more about the CFPB here.
“We want to thank all the defenders of the CFPB, including its godmother, Senator Elizabeth Warren (MA), Sen. Sherrod Brown (OH), ranking member of the Senate Banking Committee, Rep. Maxine Waters (CA), ranking member of the House Financial Services Committee and many other defenders,” added Mierzwinski. “Unfortunately, Congress, especially the House, also includes numerous opponents of the CFPB, led by Financial Services Committee Chairman Jeb Hensarling (TX) and Subcommittee Chairmen Sean Duffy (WI) and Randy Neugebauer (TX) and many others and they have passed numerous bills to weaken it.” Mierzwinski concluded, “The idea of the CFPB needs no defense, only more defenders.”
“Without a doubt, the 2008 financial crisis left millions of consumers without homes or jobs and took trillions of dollars from the retirement accounts of many others,” added Mike Litt, U.S. PIRG Consumer Program Advocate. “That’s why it is critical to defend the CFPB, because it is helping consumers hold on to their hard-earned money, and preventing special interests from engaging in the anti-consumer practices that made that crisis even worse.”
U.S. PIRG is a non-partisan, non-profit consumer organization that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. On the web at U.S. PIRG.org.
U.S. PIRG is a founding member of Americans for Financial Reform, the coalition that helped enact the Wall Street Reform and Consumer Protection Act that created the CFPB and other reforms and continues to defend them. U.S. PIRG also joined AFR today in a group CFPB birthday news release jointly with AFR and its members.
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