By Amy Traub, Demos
Unscrupulous financial corporations could make a whole lot more money if the Consumer Financial Protection Bureau didn’t stand in their way.
Since it opened its doors in 2011, the Consumer Financial Protection Bureau (CFBP) has stood up to credit card companies deceiving customers, mortgage lenders tricking borrowers into unsafe loans, and a host of shady debt collectors, crooked car salespeople, and avaricious bankers scheming to rip off American consumers. In fewer than six years, the federal agency has already obtained nearly $12 billion in relief for 29 million Americans mistreated by unprincipled financial companies.
It’s no wonder that some financial interests – joined by allies in Congress and the White House – would like to see the agency weakened, if not abolished.
Their latest salvo is a lawsuit filed by financial services company PHH Corporation. According to a CFPB investigation, PHH ran a 15-year scheme of illegal kickbacks to mortgage insurers, inflating costs to consumers for both home loans and mortgage insurance. The agency hit PHH with a $109 million fine.
But PHH struck back, attacking the CFPB’s authority in court. After an initial ruling upholding the CFPB’s authority, PHH appealed to the U.S. Court of Appeals for the D.C. Circuit, where a three-judge panel of conservative appointees ruled against the CFPB, attacking the agency’s structure and the independence of its director. This month, PHH revealed its real agenda, calling on the Appeals Court to eliminate the CFPB.
Weighing in on PHH’s side is the Trump Administration which wants more power to clip the CFPB’s independence and remove its dedicated and highly effective leader, Richard Corday.
As the courts consider the case again, Demos is proud to stand up for the CFPB and the consumers it protects. We have joined leading civil rights and consumer organizations including Americans for Financial Reform, Public Citizen, The Leadership Conference on Civil and Human Rights, and the National Council of La Raza in a brief urging the court to maintain a strong, independent agency to protect American consumers.
Demos’ research on credit cards, credit reporting, and student loans vividly demonstrates what’s at stake in the financial marketplace and why Americans need a powerful, nonpartisan CFPB. We’ll fight to keep the financial scammers from tearing it down.