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This week, on July 21, the Consumer Financial Protection Bureau turns 5 years old. The CFPB, a brainchild of then-professor Elizabeth Warren, was championed by MASSPIRG and a coalition of civil rights and community groups as part of Wall Street Reform legislation enacted in the wake of the 2008 financial collapse triggered by risky bank practices.
MASSPIRG warned, however, that the successful bureau, the first federal financial agency with only one job, protecting consumers, faces continued threats.
“Despite, or maybe because of, the CFPB’s successes in cleaning up the financial marketplace, powerful special interests from the big banks to the payday lenders and debt collectors all want to weaken its ability to protect consumers from sharp practices that unfairly take hard-earned money from our wallets,” said Deirdre Cummings, MASSPIRG’s legislative director.
Some highlights of the CFPB’s successes:
- The bureau has recovered and sent back nearly $12 billion for 27 million consumers harmed by credit card companies, banks, debt collectors, mortgage companies and others.
- The bureau has received nearly one million consumer complaints and published, so far, nearly 600,000 of these in a searchable public database.
- The bureau has finalized a variety of new rules to protect consumers, such as in the mortgage marketplace. It is in the process of finalizing two critical new rules now open to public comment:
- A proposed high cost small-dollar lending rule, if strengthened, would prevent consumers from being caught in the debt traps of payday and auto title lending. MASSPIRG’s page for you to send a comment letter is here.
- A proposed rule limiting the language in mandatory arbitration clauses in common “take-it-or-leave-it” financial contracts would prohibit companies from using arbitration clauses to deny consumers the right to band together in class actions to have their day in court.
- This month, the bureau also announced the first steps in developing a rule to protect consumers from unfair debt collection practices.
- The bureau has special offices to protect students, seniors, service members and persons at risk of unlawful discrimination.
- It has issued numerous education and financial literacy materials, including “Know Before You Owe” guides for buying a home or taking out college loans; it also has a variety of guides and programs for caregivers, legal services offices, social services agencies and librarians.
“Without a doubt, the 2008 financial crisis left millions of consumers without homes or jobs and took trillions of dollars from the retirement accounts of many others,” concluded Cummings. “That’s why it is critical to defend the CFPB, because it is helping consumers hold on to their hard-earned money, and preventing special interests from engaging in the anti-consumer practices that made that crisis even worse.”
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