The Battle Over the Consumer Financial Protection Bureau
Perhaps you are fascinated by this election season, perhaps you are already tuned out, or perhaps you are somewhere in the middle. Regardless, the result of this election will greatly impact everyone in this country as consumers. The battle being waged is not simply for the right to occupy the Oval Office, it’s for the opportunity and greater means to be able to dictate how consumers are treated in the United States.
Central in this battle is the Consumer Financial Protection Bureau (“CFPB”). Since its creation in 2010, the CFPB has handled more than 800,000 complaints and returned over $10 billion to consumers who lost money due to credit card rip-offs, payday lending scams, and other unfair and/or deceptive financial practices. Besides returning money to millions of consumers, the agency has worked hard to enact rules to protect all of us in the future. For example, the CFPB very recently proposed a rule that will allow consumers to file class action lawsuits against banks rather than be forced to resolve their complaints in arbitration all alone, an out-of-court process that almost always favors the banks and other large institutions. The CFPB also proposed a rule to end payday debt traps so that consumers are not saddled with loan payments that they are unable to repay due to extraordinarily high interest rates and fees.
Unsurprisingly, Donald Trump and many Republicans are actively trying to curtail the CFPB’s work. Republicans have already advanced dozens of bills to reduce the CFPB’s authority. Last month, Donald Trump said he was drawing up plans to dismantle nearly all of Dodd-Frank (the legislative overhaul of financial regulations that also created the CFPB). Representative Jeb Hensarling, a Texas Republican who is chairman of the House Financial Services Committee, issued a proposal to, among other things, restructure the CFPB and subject it to congressional appropriations rather than being funded directly by the Federal Reserve. Ostensibly, a Republican-controlled Congress would then largely de-fund the Consumer Financial Protection Bureau. Republicans also gave themselves new subpoena powers in order to deluge the CFPB with paperwork demands (at best) and/or dig up material that they can use to try to embarrass the Bureau (at worst). Hillary Clinton, on the other hand, supports the CFPB’s work.
As this election season rages on, remember that the battle is about more than an Office. It’s about being able to influence how consumers — every single one of us regardless of party affiliation and political beliefs — are treated. The CFPB helps ensure that we are protected from unscrupulous financial institutions, and its great work should continue unabated.
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