Slashing the CFPB’s budget will leave consumers vulnerable to fraud and abuse
WASHINGTON DC – In a letter sent to the Senate today, Consumer Reports called on its members to oppose a provision in the budget reconciliation bill that would cut the Consumer Financial Protection Bureau’s funding in half. Senator Elizabeth Warren is expected to offer an amendment to strip that provision from the bill when the Senate takes up the legislation this weekend.
“Slashing the CFPB’s funding in half would severely hinder its ability to root out discrimination and predatory financial practices that put consumers at risk of fraud and abuse,” said Chuck Bell, advocacy program director. “At a time of rising costs and so much economic uncertainty, the last thing Congress should do is weaken the watchdog created to protect consumers from losing money to financial scams and ripoffs.
Bell continued, “Congress should stand with consumers and reject this devastating cut to the CFPB’s budget. We need a strong and independent CFPB with the resources necessary to defend consumers and rein in abusive financial practices without political interference from powerful special interests.”
Congress created the CFPB after other federal financial regulators failed to rein in risky mortgage lending, which triggered the 2008 financial crisis and resulted in millions of Americans losing their homes to foreclosure. Since its founding, the CFPB has helped millions of consumers resolve their complaints with financial firms and secured more than $21 billion in refunds and relief for an estimated 205 million consumers who were treated unfairly.
CR’s letter points out that the threat to the CFPB’s budget comes after the administration has issued stop work orders, sought to lay off all but a small number of its staff, and suspended most enforcement activities. The CFPB’s acting director has halted many vitally important rulemakings and civil cases targeting companies from engaging in harmful and predatory practices, and abandoned efforts to obtain refunds and restitution for those who have been directly harmed.
Media Contact: Michael McCauley, michael.mccauley@consumer.org