By Orson Aguilar
Hold onto your wallets, America. Members of Congress and our new president want to kill vital protections that help keep you from being ripped off.
After predatory lending and dishonest practices by banks and other financial firms tanked our economy in 2008, Congress passed major reform legislation — legislation President Donald Trump has vowed to dismantle. A key provision created the Consumer Financial Protection Bureau, the federal agency whose only job is to protect Americans from being ripped off by banks, credit card companies, payday lenders and other financial businesses.
The CFPB has already secured $11.7 billion in relief for consumers from lawbreakers, the funds including major settlements with Citibank, Wells Fargo, Sprint, Ocwen Financial and Toyota Motor Credit.
In addition, the bureau has created a searchable public complaint system and database to help consumers get answers from companies and information to protect themselves. It’s taken on industries and issues other regulators long dodged, including racial discrimination and other unfair practices in auto lending. And it conducted a series of national roundtables to hear directly from consumers about their most pressing needs.
The CFPB has cracked down on numerous subprime and payday lenders who gave customers incomplete or false information, used illegal debt collection practices, or resold customers’ personal data without permission. These are the exact kinds of practices that helped cause the Great Recession. Before CFPB, literally no one in the federal government had the job of stopping such rip-offs.
Right now, CFPB is creating rules to curb the outrageous practice of mandatory arbitration, in which financial companies force customers who open an account or sign up for a credit card to sign away their right to sue if the company cheats them. These clauses, the CFPB found, affect about half of credit card customers. Big businesses prefer arbitration because consumers generally don’t do well in this process. And these agreements typically bar class-action suits, in which a group of wronged consumers band together to seek relief.
The financial lobby has never liked CFPB, and the lawmakers who do lobbyists’ bidding see this as their chance to kill it. Even if financial reform isn’t completely dismantled, they’ve floated other proposals to weaken these vital protections, ranging from firing the bureau’s outstanding director, Richard Cordray, to taking away CFPB’s independence and putting it under the thumb of members of Congress — who get very large campaign contributions from Wall Street.
If this happens, we’ll all get hurt and the U.S. economy will be in danger of another crisis. Please take a moment to ask your member of Congress to preserve the Consumer Financial Protection Bureau as a strong, independent agency. You can reach your representative via the U.S. Capitol Switchboard, (202) 224-3121.