Wednesday, May 21, 2014
Consumers Union urges House panel to reject bills that would undermine Consumer Financial Protection Bureau
WASHINGTON — The House Financial Services Subcommittee on Financial Institutions and Consumer Credit is holding a hearing today on bills that could seriously compromise the ability of the Consumer Financial Protection Bureau (CFPB) to protect consumers.
In a letter to members of the subcommittee, Pamela Banks, senior policy counsel for Consumers Union, urged lawmakers to oppose any legislation that would weaken the CFPB and its mission.
Some of the bills under consideration would make it harder for the CFPB to issue guidance on federal regulations and law, eliminate the bureau’s civil penalty fund that provides refunds to defrauded consumers, and repeal the CFPB’s authority to regulate the use of arbitration provisions in contracts for consumer financial products and services.
Banks said, “Since it opened its doors, the agency has been of the front lines of protecting consumers from some of the most egregious practices and products. The CFPB takes seriously its mission to make financial markets fair, transparent and competitive. It holds financial providers accountable to the law and to the consumers who buy their products. Any effort to undermine its structure or authority is ill-conceived and not in the public interest.”
Banks cited several examples of the CFPB’s critical work as a consumer watchdog, such as cracking down on misleading marketing of credit card add-on products, which led to more than $400 million in refunds for nearly 6 million consumers. She also pointed to the CFPB’s much-needed complaint system and database. The system has helped more than 180,000 consumers resolve problems with their financial providers, such as banks, lenders, credit card companies, and credit bureaus, and get real relief.
See below for the text of the full letter:
Today the Subcommittee on Financial Institutions and Consumer Credit will hold a hearing entitled “Legislative Proposals to Improve Transparency and Accountability at the CFPB”. The proposals under consideration would radically change the way the CFPB carries out its mission and conducts its business. Consumers Union, the policy and advocacy arm of Consumer Reports strongly urges you to oppose any proposal that would obstruct, compromise or otherwise weaken the CFPB’s ability to protect consumers.
The CFPB is a fully accountable, mission driven agency whose sole focus is making the marketplace safe for consumers to conduct their financial affairs. Since it opened its doors, the agency has been of the front lines of protecting consumers from some of the most egregious practices and products. Working with its federal and state partners, the Bureau’s enforcement actions are providing more than $3.5 billion in relief to consumers. For example, the Bureau stopped aggressive marketing of credit card add-on products that resulted in nearly six million consumers getting more than $400 million in refunds. The Bureau also took enforcement against a for-profit college for engaging in predatory student lending practices that trapped students in insurmountable debt and often resulted in default. And recently, the CFPB and its partner states obtained judgment against one of the largest non-bank mortgage servicers for taking advantage of homeowners with servicing shortcuts and unauthorized fees and illegal foreclosure practices. Foreclosure victims received over $125 million in refunds and $2 billion was set aside for underwater homeowners for sustainable loan modifications that resulted in principle reduction.
In addition, the Bureau’s complaint system and database has helped over 180,000 consumers resolve problems with their financial providers. Consumers can submit complaints about their credit cards, bank account or service, credit report, student loans and more and get real relief. The Bureau has helped consumers secure millions of dollars in monetary relief or find acceptable non-monetary solutions.
The CFPB takes serious its mission to make financial markets fair, transparent and competitive. It holds financial providers accountable to the law and to the consumers who buy their products. Any effort to undermine its structure or authority is ill-conceived and not in the public interest.
Senior Policy Counsel