Proposals Attacking CFPB Would Eviscerate Essential Consumer Protections
This week, a group of Republican Senators, led by U.S. Senator David Perdue (R-GA), introduced a bill to make the Consumer Financial Protection Bureau's (CFPB) budget come from Congress, instead of allowing the CFPB to receive independent funding as intended when Congress approved its creation in 2010. Additionally, U.S. Senator Ted Cruz (R-TX) and U.S. Representative John Ratcliffe (R-TX) have introduced legislation this week to completely eliminate the CFPB—an agency that has provided 29 million people who were harmed by financial companies with monetary relief totaling more than $12 billion. Both proposals would leave families vulnerable to financial abuse and risk bringing back a financial crisis.
Center for Responsible Lending (CRL) Policy Counsel Yana Miles released the following statement:
Passing either of these bills will revert us back to an era of reckless lending behaviors that led us to the Great Recession.
The pernicious bill to undermine CFPB's budget will embolden payday lenders and bad actors on Wall Street to continue influencing lawmakers to halt the Bureau's funding, leaving consumers vulnerable to predatory abuse.
Furthermore, contrary to the rhetoric of these lawmakers, eliminating the CFPB would only risk crippling our economy. Workers and families would suffer more from payday loan debt-traps, secret schemes like those committed by Wells Fargo, ensnarling arbitration clauses, deceptive for-profit colleges that drive students into bankruptcy, harassment from omnipresent debt collectors, home foreclosures, and other assaults by financial predators on individuals' economic freedom.
The CFPB has been an effective cop on the consumer finance beat, looking after the interest of working families, especially those in low-income communities and communities of color. It fines companies that break the law, works to prevent large financial institutions from engaging in deceptive behavior, and it enforces rules that has transformed an uncontrolled mortgage market to a more orderly sector.
It's unfortunate that extreme measures are being pushed to roll back important consumer protection laws. These proposals have nothing to do with accountability or protecting small businesses, and everything to do with leaving our country vulnerable to abusive predatory lending practices.
For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Ricardo Quinto at ricado.quinto@responsiblelending.org.