By Ed Mierzwinski, U.S. PIRG
While powerful special interests, Senators from Ben Sasse and Deb Fischer of Nebraska to Ted Cruz (TX), joined by Jeb Hensarling (TX), the Chairman of the House Financial Services Committee and the White House all call for dismantling the highly-successful Consumer Financial Protection Bureau, firing its excellent director Richard Cordray, or worse, the CFPB continues to be an agency that is on the job, conducting business as usual to protect consumers.
Its latest “Monthly Complaint Snapshot” gives many reasons we need a strong CFPB. Complaints provide an open window into the marketplace; examination of complaint data by the CFPB itself, by researchers such as U.S. PIRG (our eight (and counting) complaint database reports) and by consumers themselves has helped to make the marketplace work better. In addition to supporting a strong CFPB, we’ve also supported its constant work (here and here) to expand and make its public consumer complaint database even more useful.
Look through that window. This month’s report focuses on the credit bureaus, powerful gatekeepers to financial or employment opportunity. When they err, you lose. The report notes that fully 185,700 of the 1.1 million complaints the CFPB has received since it began work in 2011 are about consumer frustration with credit bureaus. Yet, for 40 years before the CFPB was created, the bureaus ran amok as they knew that a weak Federal Trade Commission did not have the tools necessary to bring them to heel. And while a 2016 poster child for corporate wrongdoing, Wells Fargo, was the most-complained about company in the new snapshot’s three month rolling total for September-November 2016, the Big Three credit bureaus came in next, with Equifax at #2, Trans Union at #3 and Experian at #4.
“Credit reports provide the means for consumers everywhere to take important steps in their financial lives,” said CFPB Director Richard Cordray. “The Bureau will continue to work to ensure that credit reports are accurate and when disputed issues arise on credit reports consumers are able to resolve them quickly and with little hassle.”
The top three complaint categories for January were debt collection, student loans and credit reporting. Fully 300,000 of the 1.1 million complaints that the CFPB has handled since inception in 2011 concern debt collection and the CFPB has taken numerous enforcement actions against debt collectors. Student loan complaints, which have skyrocketed (388%!), helped the CFPB to bring its January enforcement action against the behemoth student loan servicer Navient (formerly part of Sallie Mae) for “failing” students at every phase of repayment.
The latest monthly complaint snapshot (pdf) also notes that, overall, mortgages are the second most complained about category, with 264,659 complaints out of the 1.1 million so far. So, the CFPB helps howeowners, and wannabe homeowners, too.
Using the complaint database, its rulemaking authority, its enforcement powers, its educational resources and other tools, the CFPB has proven, time and again, that an independent agency that works for consumers, every day, can get the job done and make the financial marketplace fairer. Ask the 29 million consumers who’ve received a total of $11.8 billion dollars in direct restitution or other relief due to CFPB action against bad actors ranging from Wells Fargo and Bank of America to the credit bureaus Equifax and Trans Union, from the mortgage companies Ocwen and CitiFinancial to the debt collectors Delray Capital and Frederick J. Hanna’s law firm (which acted as an illegal “debt collection lawsuit mill”). Ask the military families and veterans helped by the CFPB’s Office of Servicemember Affairs or the seniors helped by its Office of Older Americans. See our “Meet The CFPB” page for more on how the CFPB works for you.
It’s disappointing that powerful special interests, including these and many others, have the attention of the White House and senior Congressional officials in their efforts to either fire the CFPB’s director, eliminate its independent funding, or even repeal the agency altogether. Chairman Hensarling’s bill to vastly diminish the protections in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, his so-called Financial Choice Act, is expected to be re-introduced soon. Leaked memos suggest that this year’s version will weaken the CFPB even further than last year’s version. While the CFPB is currently seen as having numerous more effective tools to protect consumers than the FTC, the new bill would include drastic changes to make it even weaker than the FTC.
But while these special interests complain about the CFPB, it continues to effectively do its job. The monthly complaint snapshot provides a window into the myriad problems consumers face navigating the financial marketplace just eight short years after our economy collapsed, largely due to a lack of financial regulation. If you look through that window, you’ll see that the idea of the CFPB needs no defense, only more defenders.