Wall Street Wants a Take-down of Consumer Financial Protection Bureau
The sweeping financial reforms instituted by the previous White House administration face serious threats as Wall Street and the politicians backed by them set their sights on the Consumer Financial Protection Bureau. The creation of the CFPB in 2010 is intended to serve as a watchdog over large banks and corporations that threaten consumer rights – much like what we saw leading up to the housing market collapse that drove us into a recession.
The first significant victory, of course, happened in late October, when Vice President Mike Pence cast the tie-breaking vote in the Senate necessary to block implementation of a new landmark rule by the CFPB to ban arbitration provisions by banks and credit card firms. The rule ensured wronged consumers would still have access to the courts to settle disputes via class action litigation, which evens the playing field when consumers are wronged by large corporations and financial institutions. Now, though, the arbitration provisions will continue, and class action lawsuits will grind to a halt. The CFPB’s director put it simply, “Wall Street won and ordinary people lost.”
Now, that director is stepping down, and there is ongoing talk of shutting down the CFPB, with powerful bank and business representatives lamenting the agency’s “unchecked” power and “lack of accountability.” The truth of the matter is that although the agency has only been in existence for about 5.5 years, enforcement actions against everyone from small-time debt collectors to the world’s biggest banking giants has resulted in the return of nearly $12 billion to some 30 million consumers. Further, it’s public database of consumer complaints against lenders has resulted in a host of new rules on everything from prepaid cards to student loans to mortgages. The agency also has been able to obtain some type of solution to some 160,000 consumer complaints out of 800,000.
When you look at the kinds of complaints that are being resolved, you see why class action litigation – and the CFPB – is so valuable. For instance, one consumer protection lawyer detailed how while he was away for the winter, he had his mail forwarded to an out-of-state address via the post office. However, he later learned his bank refused to forward his mail unless he contacted them directly. He had no notification of this though and thus missed a $136 payment. He also missed notification that his late fees had ballooned to $235. Within just one week of filing a complaint with the CFPB, the bank dropped the penalties and interest.
Our consumer rights attorneys in Miami recognize these are the kinds of complaints that don’t necessarily make sense for a single plaintiff to challenge a giant corporation in court. Class action litigation allows corporations to still be held accountable. The CFPB helps consumers reach fast conclusions to these kind of disputes.
Still, politicians and corporations may have a hard time waging an all-out assault on the agency. As noted in a poll conducted by Americans for Financial Reform and the Center for Responsible Lending, almost 80 percent of voters are of the mind the government must implement stringent guidelines and enforcement in order to halt another financial crisis. Even 66 percent of Trump voters want the CFPB to be either left alone or made stronger.
But that hasn’t stopped powerful interest groups from spending many millions of dollars targeting the CFPB on a number of fronts, seeking to both discredit the agency and make it less of a threat. That has included numerous media campaigns, ranging from editorials in prominent publications like The Wall Street Journal to advertisements on radio, television and billboards.
These attacks are going to continue for as long as the CFPB is effective in protecting consumers.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs,” discussing foreclosure topics that matter to YOU.