The Trump administration has a chance to keep faith with the American public by resisting strident calls from big money interests and some in Congress to fire Director Richard Cordray and weaken the Consumer Financial Protection Bureau (CFPB).
The financial crisis of 2008 stripped millions of Americans of their livelihoods. Many consumers lost everything—their jobs, their money, their homes—in a matter of months, days, even hours. And those most affected were those that needed the most protection. The young, the elderly, and the underprivileged were disproportionately affected by the crisis.
In an effort to curb the abusive practices that abounded pre-crisis, Congress and the Obama administration passed the Dodd-Frank Act in 2010, which created the Consumer Financial Protection Bureau. President Obama appointed Richard Cordray as the director of the CFPB, and after a lengthy review, the Senate overwhelmingly confirmed him in a bipartisan vote of 66-34.
Under the direction of Richard Cordray—Ohio’s former attorney general, longtime champion of consumers, and a man of deep integrity—the CFPB has made huge strides in bringing to light and fighting abusive and deceptive behavior of financial institutions.
To date, the CFPB has recovered $11.7 billion from credit card banks, payday lenders and other financial firms, providing relief for approximately 27 million consumers. The CFPB has also imposed $440 million in civil penalties to punish wrongful conduct and deter future harms.
The CFPB has created a consumer complaint database to ensure that consumers are heard. This complaint process provides consumers with a forum for comparing financial companies and helps the Bureau pinpoint the most dangerous practices. Consumers have filed nearly a million complaints through the system. The CFPB handled over 26,000 consumer calls every month, and over 3,500 companies have responded to consumer complaints submitted through the database.
The CFPB has made significant progress in protecting and empowering consumers that are among the most vulnerable to financial manipulation, including students, veterans and military families, and the elderly.
The CFPB has put together a toolbox to help students make informed choices about loans and payments. One resource in this toolbox is the Financial Aid Shopping Sheet, which the CFPB created together with the Department of Education to help students understand the types of loans they would qualify for. The CFPB has also fought against bad practices, including by recovering $480 million for students at for-profit chains who were deceived into taking predatory loans.
The CFPB has helped veterans and military families, who are too often taken advantage of, especially during overseas deployments of loved ones. The CFPB protects servicemembers from by practices by payday lenders and has recovered more than $100 million in refunds. It has provided military families with materials to help educate them about financial services, including payday loans and mortgages. Through both enforcement and education, the CFPB has made significant strides to ensure the financial safety of our military servicemembers.
Older consumers are much more susceptible to financial abuse, and the CFPB has helped to shield the elderly from deceptive practices. According to a survey conducted last year, 6.8 million American citizens aged 65 or older—approximately 17 percent of America’s senior citizens—have been “taken advantage of financially.” Many older Americans may not even realize that they have been deceived.
The CFPB has collaborated with the Federal Deposit Insurance Corporation to create the Money Smart for Older Adults resource guide, which help equip senior citizens with tools to detect and prevent financial exploitation. The CFPB has released other tips to protect the elderly from financial fraud and manipulation, and its enforcement actions are protecting older Americans from abuse.
American consumers can ill afford to see the CFPB weakened or its director fired. President Trump should stand with American families and protect the CFPB from attack.
Michael S. Barr is the Roy F. and Jean Humphrey Proffitt Professor of Law at the University of Michigan Law School and a senior fellow at the Center for American Progress. He was a key architect of the Dodd-Frank Wall Street Reform and Consumer Protection Act, having served as assistant secretary of the U.S. Treasury Department during the Obama administration.
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