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Member activity

USA: don’t turn financial watchdog into big bank lapdog says CU

Consumers Union (CU) of the US recently sent letters urging members of the US Congress to stand up for consumers and oppose recent legislative attempts to undermine the new Consumer Financial Protection Bureau (CFPB). The letter came as the organisation unveiled full-page ads in prominent national newspapers warning that bills making their way through the House of Representatives would put the CFPB on a short leash, turning the bureau from a consumer watchdog to a Big Bank lapdog.

Ellen Bloom, the senior director of federal policy and CU's Washington office said, "The Consumer Financial Protection Bureau was created after shady subprime mortgages triggered a record number of foreclosures and ultimately our financial crisis. American families have already paid a steep price for years of lax oversight of credit card scams, hidden bank fees, and other financial rip-offs.  Consumers need this watchdog, but opponents want to put a muzzle on the CFPB before it even gets started."

 

Pitfalls of bills

The letters, sent to members of both the House and Senate, address the pitfalls of the three bills passed last week by the House Financial Services Committee that would hamstring the CFPB's ability to rein in abusive financial practices.  One bill would replace the CFPB's director with a five-member commission, bogging down the bureaucratic structure, while another bill would make it easier for a panel of financial regulators to reverse actions of the new agency. A third bill would prevent the agency from using its new authority in July unless it is led by a Senate-confirmed director, a move that would unduly politicize and delay the operations of the CFPB.

The House Financial Services Committee's approval of the bills followed a pledge by 44 Senators to vote against any nominee to head the CFPB unless the President agreed to similar changes that would ultimately limit its ability to protect consumers.

"As we have seen from our most recent economic downturn, strong consumer protection is essential for a strong financial system. Congress should stand with consumers, not the big banks and Wall Street firms…We strongly urge you to oppose these bills," Bloom writes in the letter.

CU has been stepping up it's support for the CFPB as it comes under pressure on a number of fronts, including new proposals for simplified mortgage disclosures and a national complaints system, as recently covered by the Washington Post and Bloomberg News.

For more information on CU's campaign, see www.DefendYourDollars.org

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