Consumer Reports Praises the CFPB For its Track Record of Safeguarding Consumers and Holding Wrongdoers Accountable
WASHINGTON, D.C. – In the twelve years since the Consumer Financial Protection Bureau first opened its doors, the financial regulator has established itself as a critical watchdog for consumers, according to Consumer Reports. CR is applauding the CFPB on its 12 year anniversary at a time when the Bureau’s funding and institutional independence are being challenged by predatory lenders in a case before the Supreme Court and by opponents in Congress.
“Since its founding, the CFPB has been a vital cop on the beat enforcing the law and holding banks and other financial firms accountable when they engage in shady practices that cheat consumers out of their money,” said Jennifer Chien, senior policy counsel for financial fairness for Consumer Reports. “The CFPB has racked up an impressive record of accomplishments, establishing clear rules to ensure consumers are treated fairly when they take out a loan, make a payment, or open a bank account; helping millions of consumers resolve their complaints with financial firms; and winning billions of dollars in relief for those who have been mistreated.”
Chien continued, “By working tirelessly on behalf of consumers, the CFPB has helped foster a fair, competitive and transparent financial marketplace. As financial products and services continue to rapidly evolve, we need to maintain strong oversight by the CFPB to root out discrimination and the latest bad practices, and to close regulatory gaps that leave consumers vulnerable to fraud and abuse.”
Notable achievements of the CFPB over the past twelve years include the following:
Establishing rules of the road to protect consumers. The CFPB has taken significant steps to create a more fair and inclusive financial system by providing important regulatory clarifications and requirements for financial institutions. Key examples include:
- Protecting consumers from risky lending practices by requiring lenders to assess the ability of a consumer to repay a mortgage loan before it is offered
- Ensuring that consumers get clear, upfront information about prepaid account fees so they can choose the best card for their needs
Helping consumers resolve disputes. The CFPB’s Consumer Complaint Database provides consumers with an easily accessible channel to resolve disputes with their financial firms.
- The CFPB has received more than 3,850,000 complaints from consumers since launching the database
- 98% of complaints forwarded to companies get timely responses
Obtaining relief for mistreated consumers. The CFPB has obtained $17.5 billion in refunds and other relief for an estimated 200 million Americans who were treated unfairly by financial firms. Key examples include:
- Bank of America was required to pay more than $100 million to customers for systematically double-dipping on fees for insufficient funds, withholding cash and reward points on credit cards, and misusing sensitive customer information to open unauthorized accounts.
- Wells Fargo was required to pay $2 billion in restitution and canceled debts to customers and a $1.7 billion fine for widespread fraud and abuse involving its auto loans, mortgages, and deposit accounts. This is on top of the $3 billion Wells Fargo was ordered to pay for opening fake accounts in its customers’ names.
- Ally Financial Bank was required to pay $80 million in damages and a $18 million civil penalty for discriminatory auto loan pricing practices that harmed people of color.
- The CFPB sued the for-profit Corinthian College for defrauding its students over many years and secured $683 million in loan cancellations.
Developing safeguards to protect consumers from emerging risks. The CFPB has been proactively identifying new risks to consumers arising from digital finance and clarifying how new technologies can be applied fairly. Key examples include:
- Clarifying that lenders using complex algorithms to make credit decisions must still be able to explain their adverse decisions in order to prevent discrimination
- Clarifying that digital marketing using sophisticated behavioral targeting techniques must still comply with consumer protection rules
Michael McCauley, michael.mccauley@consumer.org