By Maureen Mahoney, Consumers Union
The sharks are circling around the Consumer Financial Protection Agency (CFPB), the consumer watchdog that was created to defend consumers – and protect the economy – in the wake of the financial crash of the late 2000’s.
In the last few weeks, we’ve seen a flurry of bills that seek to disempower or even abolish the agency in order to prevent it from doing its good work on behalf of consumers. Last week, Senator Sonny Perdue from Georgia introduced a bill that would bring the independent agency under the Congressional appropriations process – giving the friends of the banking industry in Congress the ability to starve the agency of the funds that it needs to do its job.
If passed, Sen. Perdue’s bill would be a nightmare for consumers. Perhaps not surprisingly, according to The Hill, Sen. Perdue’s proposal has the support of banking interests like the American Bankers Association (ABA). If Congress were in control of the CFPB’s funding, opponents of the agency would have the power to halt the funds it needs to operate. The CFPB and most other independent financial regulatory agencies, including the Office of the Comptroller of the Currency, the Federal Reserve, and the Federal Deposit Insurance Commission were specifically designed to maintain budgetary independence and avoid this fate.
Another recent attack came from Sen. Deb Fischer (NE), who introduced legislation in January to transform the structure of the CFPB from from an agency headed by a single director to a five-member commission. Such a change would make it difficult for the CFPB to police the marketplace and take action on behalf of consumers. Finally, Rep. Hensarling (TX), chairman of the House Financial Services Committee, is considering legislation that would remove the CFPB’s ability to regulate and enforce the rules of the road for bad actors and unsafe products in the marketplace.
The CFPB was designed to protect consumers from predatory lending, unfair debt collection, shady credit cards, and more. So far, it has returned nearly $12 billion to consumers in just a few short years and developed comprehensive pro-consumer regulation of financial products such as mortgage loans and prepaid cards.
We strongly support the CFPB’s efforts to protect consumers from harmful and deceptive financial products, but we need your help to fight back against the powerful banking industry. Click here to sign our #DefendCFPB petition in support of Director Cordray and the CFPB today!