These actions will serve as a warning signal for anyone who seeks to profit by deceiving or misleading consumers,
said CFPB Director Richard Cordray, who provided prepared testimony to the Senate Banking Committee earlier this week. It was all part of his report to Congress and by any standards, the accomplishments of this still-in-its-infancy consumer watchdog group, are more than impressive. So why are some members of Congress acting like spoiled brats? Worse, why are there those in some committees who refuse to even acknowledge the works by Cordray and CFPB?
Earlier this week, the government consumer watchdog group was prepared to tell Congress of its many accomplishments over the past several months. There’s a lot for these folks to be pleased about. Not only that, but for once, consumers have found the one government body that’s actually not interested in the politics of personal finance, but rather, the one thing that makes these finances personal: the consumer. Richard Cordray, director of the Consumer Financial Protection Bureau, proudly declared that his agency had secured $425 million in relief for 6 million consumers and is addressing 130,000 complaints on a range of financial products and services. Remember, we often here of these huge fines being put on banks and credit card companies, but it’s rarely the consumer who sees any of these funds. Not so with CFPB. Its goal is focused on righting the wrongs – not padding its own coffers. There are many consumers who have benefited from the group.
The bureau has also adopted new mortgage regulations banning “irresponsible lending practices that helped bring about the recent financial crisis,” Cordray said. He also provided information on massive efforts of reaching out to a “cross-section of American consumers, including older Americans, students, military service members and others – and what we heard from them has guided the direction of our work.” Impressive, right? When is the last time any member of the government says it’s you and me who direct his work – and meant it? The CFPB Chief touts success, and yet, there are those who still want the agency silenced.
As he moved through his testimony, he provided details on the progress made in transitioning debt collection and credit reporting agencies and said,
The debt collectors covered by our supervisory authority account for over 60 percent of the industry’s annual receipts in those markets…Bad actors in this market are a detriment to consumers and to every debt collector that operates lawfully.
CFPB Takes Action
If you’ve ever found yourself completely frustrated and overwhelmed with trying to get errors removed your credit report, there’s a good chance those days are behind you. The three big credit bureaus have operated with little, if any, government oversight. As a result, it’s the consumers who have paid the price. If the bureaus are not accountable, they’re free to do what they wish. Now, though, CFPB can evaluate whether federal consumer laws are being followed throughout the process, “from credit origination through debt collection.”
Don’t forget, the bureaus first wins came against credit card companies that had deceived their respective customers and as a result, CFPB returned millions of dollars to these consumers. Cordray reminded Congress that often, it was the “economically vulnerable consumers with low credit scores and low credit limits” who were victimized.
So if all of these dynamics are falling into place from the one agency that takes transparency to a new limit, why isn’t Congress happy? You’d be surprised.
For some bizarre and ridiculous reason, Rep. Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, says he can’t “legally accept testimony” from Cordray until he’s the valid director. Ah – but don’t misunderstand him – Hensarling wants to continue with his own efforts of “rigorous oversight of the CFPB.”
Obama Appoints, Congress Ignores
The problem is – Cordray is ready and has been since the bureau’s inception. The Senate refused to act. President Obama appointed Cordray in 2012, but a unanimous federal appeals court ruling just days after the appointment, it was ruled that the process by which Cordray was appointed was constitutionally invalid. Hensarling continues to espouse that ruling as his justification,
The court’s unanimous ruling makes it clear that there is no legally-appointed director of the CFPB at this time. By law, the committee can receive this testimony only from a director who is appointed in accordance with the Constitution and the Dodd-Frank Act, which created the bureau.
Money and Politics
Let’s face it. The Dodd Frank Act is highly unpopular with the Republicans and those in the banking industry. It’s what has significantly cut into the fees and practices that created the too big to fail banks. This past January, Hensarling called the law tightening oversight of Wall Street among the most “harmful our capital markets have seen.”
Hensarling and others don’t like CFPB because of its thorough and complete efforts of protecting consumers – including going up against the banks and credit card companies that until its was founded, had operated as they wished with no oversight. The fact that Cordray has not only stepped up to the plate since day one, but has made incredible strides in changing the way consumers are treated in the financial sector should be reason enough to get off the soapbox so many lawmakers are happy to stand on and get back to the business of running this country minus the juvenile antics and temper tantrums.
Hensarling didn’t stop there, though. He penned a letter to CFPB associate director and general counsel, Meredith Fuchs. He said that the Committee, in all of its glorious martyrdom,
stands ready to accept the testimony of the director of the CFPB on the semi-annual report as soon as an individual validly holds this position. Until then, the committee intends to continue to conduct rigorous oversight of the CFPB’s activities, and will expect the CFPB’s cooperation in those efforts, including making other employees available to testify at committee hearings and responding fully to committee requests for documents and information.
Hensarling also said he’s working to make changes to the CFPB’s structure that would make the bureau accountable,
Hardworking taxpayers expect and deserve accountability and oversight of all government agencies, especially one like the CFPB which directly affects every American household. The American people have the right to know how this government agency operates and what it plans to do with its half-billion dollar budget every year
It’s interesting, though, because this is the one government agency that has nothing to hide – so it hides nothing. Our considerable research efforts left no questions unanswered. CFPB is probably the most transparent government agency in this country.
At least one person didn’t fall for it. Representative Maxine Waters asked Hensarling to reconsider his position and let Cordray deliver his semi-annual testimony on the CFPB’s work. If Cordray doesn’t get a chance to testify, Waters, the top Democrat on the financial services committee, said she is “prepared to use the rules of the committee to provide the director the opportunity to give testimony.”
What does all of this mean for consumers? Would you be surprised to learn, at this point in time anyway, that once again, egos and politics have become the focus of this nation’s elected leaders? We weren’t surprised either.