Consumer Financial Protection Bureau: What You NEED to Know

The Consumer Financial Protection Bureau is under assault. Donald Trump has appointed Mick Mulvaney as the director of the watchdog agency. A man who opposes the agency's core mission.

Here is what you need to know about the Consumer Financial Protection Bureau:

The Consumer Financial Protection Bureau (CFPB) was created through the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in response to the 2007 financial crisis. It was specifically fashioned as an independent agency to safeguard the US from another catastrophe like the ‘Great Recession’ which, as we know, was caused by the unregulated predatory lending practices of large financial institutions. The CFPB was created specifically to protect consumers from those predatory lenders and dangerous financial products. Prior to the 2007 fiscal crisis, predatory lenders could and would con customers into loans or other financial products that had a high probability of sending those customers into financial ruin. They were allowed to sell those dangerous financial products to customers without ever having to disclose the probability that the customer would be ruined. The CFPB put an end to those predatory practices.

Why do Financial Institutions hate the CFPB?

Well for one, the CFPB has fined and penalized banks who engaged in predatory practices and has returned approximately $11.8 billion in funds to consumers who have been victimized by predatory schemes. That is money that Wall Street and the ‘Big Banks’ want back. They also want to go back to the same predatory practices they engaged in prior to the passage of Dodd-Frank.

The CFPB has been successful in its mission to protect consumers. That is why they hate it.

What are some of the practical arguments against the CFPB?

There are none, unless you consider unsubstantiated claims of a runaway agency stunting economic growth.

House Financial Services Committee Chairman Jeb Hensarling's (R-Texas) reasons for advancing legislation to undermine the CFPB: “The CFPB undoubtedly remains the single most powerful and least accountable federal agency in all of Washington.”

Ted Cruz (R-Texas) called the CFPB “a runway agency” and “does little to protect consumers”. Cruz wants to abolish the CFPB and give Congress “the opportunity to free consumers and small businesses from the CFPB’s regulator blockades and financial activism, which stunt economic growth.”

Ironically, the very same day that Cruz claimed the CFPB “does little to protect customers” the agency announced a $700 million settlement with Citibank for conning 8.8 million customers through “deceptive marketing, billing and administration of debt protection and credit monitoring add-on products”. That is $700 million that went back to victimized customers.

America lost $10.2 trillion in the ‘Great Recession’ and as a result our government passed a nearly toothless financial reform bill, but now even the most basic regulations designed to prevent us from driving our economy off a cliff are on the brink of being eliminated. This is a sad state of affairs.

Here is what you can do:

  • Call your senators and representatives. (202) 224-3121. Tell them to do everything they can to protect the CFPB.
  • Stay informed and do your part to advocate for these important issues whenever and wherever you can.
  • Support progressive candidates in your local elections. 




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