The United States Consumer Financial Protection Bureau has made great strides in carrying out its mission, which is to ensure consumers are fairly treated in the financial marketplace, Director Richard Cordray said Tuesday in delivering the bureau’s semiannual report at a House Financial Services hearing.
The bureau’s qualified mortgage rule put new measures in place to prevent the sloppy underwriting that led to the subprime mortgage problem, widely acknowledged to have caused the financial crisis of 2008.
The CFPB also has released a proposed rule that would allow for more lending by community banks and credit unions, and would expand the definition of the term “rural areas,” Cordray told committee members.
What Else the CFPB Has Done
Over the past six months, the bureau also has issued final revisions to the remittance rule; proposed a rule to overhaul the reporting requirements for the Home Mortgage Disclosure Act; released new tools to let the public access and use HDMA reports; and finalized a rule making it easier for companies to make annual privacy disclosures, which would save them US$17 million annually if widely adopted.
During the reporting period, the bureau also launched enforcement actions that led to orders for more than $1.6 billion in relief for consumers victimized by violations of federal consumer financial laws — such as deceptive credit card practices, including deceptive marketing of credit card add-on products, and predatory lending schemes that targeted 17,000 armed forces members and other consumers.
CFPB filed suit against a debt collection lawsuit mill that targeted consumers with more than 350,000 deceptive court filings in Georgia alone over a four-year span.
Further, the bureau continued to develop educational tools for consumers, including the “Your Money, Your Goals” toolkit, Cordray said.
“We’ve developed many other consumer resources, including … financial education guides on a wide range of consumer products and services, and consumer protection resources for service members,” CFPB spokesperson Moira Vahey told CRM Buyer.
Getting the Banks’ Backs Up
The CFPB conducted a study on high-cost credit extended to members of the United States’ armed services. The U.S. Department of Defense cited the problem in its proposal last year to extend the Military Loans Act to tackle predatory lending practices against services members and their families.
The American Bankers Association has written the DoD criticizing the study. It also has written the CFPB, asking it to remove the mortgage rate calculator from the Bureau’s website.
The ABA’s ire against the CFPB, which it regards as inadequately supervised and unjustifiably adding to bankers’ onerous reporting requirements, is long-standing.
“Powerful special interests like the old days when they ran amok without a strong consumer regulator,” said Edmund Mierzwinski, consumer program director at U.S. PIRG.
“They’ve also forgotten the lessons of 2008, so they’ve revved up the Congress to attack the CFPB,” he told CRM Buyer.
Hating on the Bureau
An astounding amount of vitriol is being leveled at the CFPB.
“Industry groups like the Chamber of Commerce and the GOP have made it clear that undoing the utility of the CFPB is one of their top priorities in Congress,” noted Lisa Gilbert, director of Public Citizen’s Congress Watch division.
“Wall Street would prefer to have free rein, so opposes robust consumer financial protections like those provided by the CFPB,” she told CRM Buyer.
Public Citizen is among more than 340 organizations that have written Congress in support of the CFPB.
“The CFPB has been under attack by the Republicans since it was created,” said John Simpson, privacy advocate at Consumer Watchdog, one of the 340.
Because they “go after dubious practices,” he told CRM Buyer, it’s “essential to defend” agencies like the bureau.