January 4, 2012
WASHINGTON, D.C. – Consumers Union, the policy and advocacy arm of Consumer Reports, today applauded the news that Richard Cordray will be appointed to serve as the director of the Consumer Financial Protection Bureau (CFPB).
While Cordray has received bipartisan praise, his appointment has been held up for months in the Senate, where opponents of the CFPB demanded changes be made to weaken the bureau. The absence of a full-time director has prevented the CFPB from exercising its full authority to protect consumers.
“Congress created the CFPB to be a watchdog for consumers, and it has to have a director to put its full powers to work,” said Pamela Banks, senior policy counsel for Consumers Union. “This consumer watchdog has been muzzled by the political process for way too long. This move is the right move for consumers. We need someone to stand up to protect people from abuses by big banks and shady lenders. Richard Cordray is a good choice with support by people on both sides of the political aisle, and it’s time to let him get to work. Today’s appointment means the CFPB finally will be able to protect consumers from unscrupulous lenders, financial scams and other rip-offs.”
The CFPB was created by the Wall Street reform law passed by Congress in 2010. The bureau opened its doors in July 2011. It was established to make sure financial companies provide consumers with the information they need to understand the true costs and risks of different financial products. The bureau is charged with identifying and stopping unfair, deceptive, and abusive financial practices and keeping the rules governing financial service products up-to-date.
However, the political stalemate in the Senate has left the CFPB without a full-time director. The bureau has been unable to use its authority to oversee non-bank financial institutions like payday lenders, debt collectors, check cashers and certain mortgage lenders who target vulnerable consumers, according to a report by the Treasury Department’s Inspector General. The report also says the bureau’s ability to prohibit unfair, deceptive, or abusive financial practices is limited without a director. Consumers Union has been pushing policymakers to end the stalemate so Cordray could take the wheel and steer the bureau to help consumers.