Congress considering legislation that guts the Consumer Financial Protection Bureau
May 10, 2017
WASHINGTON, D.C. – Tonda Benge, of Reno, Nevada, is joining over 100 other consumers and advocates today from 36 states across the country on Wednesday, May 10, to urge their lawmakers in Congress to oppose efforts to weaken the Consumer Financial Protection Bureau (CFPB). Benge will be meeting with Senator Dean Heller, who is considered a potentially critical vote in the debate over the future of the CFPB.
The Consumer Lobby Day, organized by the Consumer Federation of America and co-sponsored by other groups, including Consumers Union, the policy and mobilization division of Consumer Reports, is taking place as Congress gets ready to vote on legislation that would severely limit the ability of the CFPB to protect consumers from unfair and abusive financial practices.
Benge is particularly concerned about the debate in Congress because she nearly lost her home to foreclosure because of unfair treatment by her bank. In 2007, Benge contacted her bank to try to modify her mortgage and lower her monthly payment. She was told to stop making her payments for three months in order to qualify for a refinance of her loan. But when she followed those instructions, the bank began foreclosing on her property instead of refinancing her mortgage.
“I had to have a lawyer negotiate with the bank and eventually they agreed to a loan modification,” said Benge. “But this added nearly $70,000 to my loan balance pushing me further into debt. Consumers like myself need a strong Consumer Financial Protection Bureau to make sure we’re not taken advantage of and lose our homes.”
The House of Representatives is expected to vote on a bill in mid-May that would eliminate the CFPB’s authority to supervise banks, credit reporting agencies, and payday lenders. The watchdog would lose its ability to stop unfair, deceptive, and abusive practices. The bill even blocks the CFPB’s authority to conduct education campaigns to help consumers make smarter financial decisions and would prevent the CFPB from making public the complaints it collects from consumers who have been mistreated by financial institutions.
Under the bill, the CFPB would also lose its crucial independence from banking industry control. The CFPB’s director could be fired at will by the President, unlike other banking regulators, and the agency’s budget would be subject to the annual congressional appropriations process, opening it up to further attack by financial industry lobbyists and other opponents determined to undermine the agency and shrink its budget. Similar legislation to create more bureaucracy at the CFPB and politicize its budget has been introduced in the Senate.
“The CFPB works tirelessly to make sure consumers are treated fairly and protected from financial fraud and rip-offs that can drain their wallets,” said Christina Tetrault, staff attorney for Consumers Union. “The CHOICE Act is the wrong choice for consumers because it guts the CFPB and would leave consumers vulnerable to scams, hidden fees, and costly financial gotchas.”
The CFPB was established as part of the measures passed by Congress in the wake of the 2008 financial crisis. The Bureau works to ensure consumers are treated fairly by establishing basic standards that banks and other financial companies must follow and by policing abuses in the marketplace. Since the CFPB opened its doors in 2011, it has won almost $12 billion in refunds and relief for an estimated 29 million Americans who’ve been defrauded by financial companies.
Contact: Michael McCauley, mmccauley@consumer.org, 415-902-9537 (cell)