Lawmakers, Lobbyists Attack Consumer Protection Agency
2/1/2017, 3:24 p.m.
As a new Congress and White House begin their respective governmental roles, a still-growing cadre of supporters and opponents are focusing on the future of the Consumer Financial Protection Bureau (CFPB).
Ironically, Capitol Hill’s ongoing regulatory tug-of-war is really not a partisan issue for much of the nation. Early consumer polls documented that the strongest supporters for financial regulation were consumers of color. Considering that Black and Latino consumers are often targeted for financial abuse, strong support is understandable.
Even a December 2016 online poll conducted by Glover Park Group/Morning Consult revealed strong support for CFPB among Trump voters as well:
By a margin of 55 to 28 percent, Trump voters oppose efforts to weaken or eliminate the CFPB;
47 percent say the Dodd Frank financial reforms should be kept or expanded, as against 27 percent who want to see that law scaled back or repealed; and
41 percent want the bureau to be left alone, and 14 percent say its power should be increased.
So why are some Capitol Hill lawmakers and lobbyists still determined to attack the CFPB and Richard Cordray, it’s the director of the agency? A number of recent actions appear out of sync with even President Trump’s base.
As early as January 11, a bill was filed to change CFPB’s governance from a single director to a five-member commission. Nearly six years ago, CFPB opponents tried unsuccessfully to create a less efficient commission rather than an accountable, single director structure. Sponsored by Nebraska’s Senator Deb Fisher, the measure was assigned to the Senate’s Committee on Banking, Housing and Urban Affairs and awaits further consideration.
On January 20, Reince Priebus announced to federal agency heads and executive departments that a regulatory freeze would take effect at noon that same day. As an independent law enforcement agency, many consumer advocates would argue that CFPB should be exempted from executive actions.
Even though the Priebus memo made no specific mention of CFPB, the specter of its still pending regulation hangs in the balance. After public hearings and comments, many consumer advocates anxiously await rules that would govern small dollar loans such as payday and car-title, and others affecting debt collection and auto finance.
In the meantime, a growing number of lawmakers, state officials and consumer advocates are raising their respective voices to alert consumers of all that is at stake and their commitment to financial fairness.
A total of 16 state attorneys general agree. On January 23, Connecticut AG George Jepsen and his colleagues filed a motion to intervene in a federal appeals case, defending the constitutionality of the CFPB.
Writing for the group, AG Jepsen said, “The CFPB is the cop on the beat, protecting Main Street from Wall Street misconduct. It was structured by Congress to be a powerful and independent agency that would protect consumers from the abuses of Wall Street, banks, and other large financial institutions…. That mission is still critical to consumers today.”
The following day, January 24, a letter to President Trump from 38 members of the Congressional Black Caucus called for Director Cordray to remain in his position through his confirmed 2018 term. According to the CBC members, with Director Cordray’s leadership nearly $30 million in civil monetary penalties and over $400 million in restitution went to 1.4 million minority consumers.