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BOSTON — The Massachusetts Public Interest Research Group (MASSPIRG), the National Consumer Law Center (NCLC), and the Massachusetts Office of Consumer Affairs and Business Regulation joined in announcing the launch of the Consumer Financial Protection Bureau (CFPB) on Thursday, July 21, and urged swift confirmation of a director to head the Bureau.
MASSPIRG also released two new reports supporting the CFPB and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The first is a nationwide poll showing that voters overwhelmingly support a new consumer agency and want Wall Street held accountable, and the second documents “10 reasons” consumers need the new Consumer Financial Protection Bureau.
The Dodd-Frank Wall Street Reform and Consumer Protection Act passed last year in response to the worst financial crisis since the Great Depression. It reins in Wall Street and protects consumers, investors, and taxpayers from further financial meltdowns. It created the new CFPB to be the nation’s chief consumer bank regulator, supervising mortgages, credit cards and other bank loans, including overdraft fees. The entire Massachusetts delegation voted to pass the bill last year.
Sen. Brown worked to create the Office of Service Member Affairs within the new bureau to provide education to military families and oversight of the lending institutions that target them. Referring to the increase in illegal home foreclosures on deployed military members as “heartbreaking,” the Senator is hopeful that the Office will give military members an opportunity to have their voices heard. The Office is to be directed by Holly Patraeus, wife of Gen. David Patraeus.
“The CFPB is designed to create a more secure financial future for all Americans,” said Lizzi Weyant, staff attorney at MASSPIRG. “It is the biggest consumer protection bill since the creation of deposit insurance (FDIC) after the 1929 crash. For the first time in over 80 years, we have a way to help consumers and the economy recover from the financial meltdown that cost millions of jobs and trillions of dollars in home and retirement fund value,” said Weyant.
“The launch of the CFPB is a great milestone for consumers in Massachusetts and around the country. The Bureau will develop new protections and a national visibility platform for financial issues that will make for a better marketplace for consumers,” said Barbara Anthony, Undersecretary of Consumer Affairs and Business Regulation.
This week, President Obama announced his intention to nominate Richard Cordray, former Ohio Attorney General, to become the first director of the CFPB. Cordray was originally appointed by Elizabeth Warren to serve as the enforcement chief of the bureau, and still has to be confirmed by the Senate. Powerful Wall Street banks continue to oppose the bureau and have vowed to block the confirmation of any director.
This spring, 44 Senate opponents of the CFPB, led by Majority Leader Mitch McConnell (KY) and Richard Shelby (AL), sent the president a letter threatening to block “any” nominee to head the Bureau unless its powers are rolled back and its funding weakened. Legislation is expected on the House floor as early as this week to roll back the CFPB.
“We need the Senate to act quickly to confirm General Cordray,” continued Weyant. Without a director, the CFPB will not have its full authority to protect consumers in the financial marketplace, and it won’t have the political clout needed in regulatory battles with Congress, other bank regulators, and the banks themselves. “Wall Street banks want to go back to business as usual,” said Weyant, “they oppose the CFPB and we need to keep fighting back.”
“The CFPB will stand up for the average American consumer and level the playing field against the moneyed interests that represent large corporations,” said Chi Chi Wu, Staff Attorney at the National Consumer Law Center.
The poll released today by consumer groups supports Wu’s comment. Nearly three-quarters of all likely voters support a “single agency with the single mission of protecting consumers” from unfair financial practices, and three-quarters of all likely voters want Wall Street held “accountable.” Two out of three likely voters agreed that “we cannot get our economy back on track without strong financial reform.”
The creation of the CFPB will protect American consumers, toughen regulations of financial institutions, and set up procedures to shut down big banks instead of bailing them out at the taxpayers’ expense. Its creation was supported by over 250 national and state organizations that joined together to fix our financial sector.
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