The U.S. House of Representatives is working hard to pull the wool over your eyes in the name protecting consumers. The Financial Services Committee boasts it is trying to serve the interests of consumers when in fact it is taking steps to make you less financially safe.
You have to ask, if the committee is fighting so hard for hardworking taxpayers, and wouldn’t that include undocumented residents who pay taxes, then why are they proposing to gut the Consumer Financial Protection Bureau?
Here is What They Propose
Empower Americans to achieve financial independence by fundamentally reforming the CFPB and protecting investors.
- Change the name of the CFPB to the “Consumer Financial Opportunity Commission (CFOC),” and task it with the dual mission of consumer protection and competitive markets, with a cost-benefit analysis of rules performed by an Office of Economic Analysis.
- Replace the current single director with a bipartisan, five-member commission which is subject to congressional oversight and appropriations.
- Establish an independent, Senate-confirmed Inspector General.
- Require the Commission obtain permission before collecting personally identifiable information on consumers.
- Repeal authority to ban bank products or services it deems “abusive” and its authority to prohibit arbitration.
- Repeal indirect auto lending guidance. – Source
Personally I think they should be honest and suggest changing the name of the CFPB to “Consumer Financial Regulatory Commission” (CROC) because this effort fits the definition of Crock – a thing that is considered to be complete nonsense. As in what a crock of ****.
The most gutting suggestion is to “Repeal authority to ban bank products or services it deems “abusive” and its authority to prohibit arbitration.”
And what would that action stop, oh let’s see what the CFPB has done about stopping abusive bank practices:
- Consumer Financial Protection Bureau Fines Wells Fargo $100 Million for Widespread Illegal Practice of Secretly Opening Unauthorized Accounts
- CFPB Orders Bank Of America To Pay $727 Million In Consumer Relief For Illegal Credit Card Practices
- CFPB Orders Citizens Bank to Pay $18.5 Million for Failing to Credit Full Deposit Amounts
- CFPB Orders U.S. Bank to Pay $48 Million Refund to Consumers Illegally Billed for Services Not Received
- CFPB Orders GE Capital to Pay $225 Million in Consumer Relief for Deceptive and Discriminatory Credit Card Practices
- CFPB Orders Chase and JPMorgan Chase to Pay $309 Million Refund for Illegal Credit Card Practices
And that list is just the tip of the iceberg in actions the CFPB has taken to help protect consumers from abusive bank practices. You know, the exact types of actions that the purported friend of the taxpayer wants to eliminate the authority for the CFPB to protect against.
And don’t even get me started on the abusive arbitration clauses the bill wants to eliminate that are knifing taxpayers in the back.
When you dig down into the committee documents you see this taxpayer protective effort wants to gut protections from payday loans, auto loans, unfair and deceptive acts, etc.
The committee actually defends it’s actions by saying, “The Bureau has also decided to ignore the sovereign will of 50 duly-elected state legislatures and tribal authorities by proposing a rule to regulate the small dollar, short-term credit market absent any Congressional directive or pressing need identified by the states.” Because people are getting screwed over these loans! Read this. And do we really need to protect more highly abusive tribal payday loans?
The committee goes on to say, “Perhaps most emblematic of the Bureau’s counterproductive approach to consumer financial product regulation is its opaque and iterative practice of regulation by enforcement using its “unfair, deceptive, and abusive acts or practices” (UDAAP) authority under Section 1031 of the Dodd-Frank Act. Because the Bureau has declined to define what constitutes a UDAAP violation, financial firms are either cutting back product offerings to lower-income Americans or offering them only “plain vanilla” consumer financial products.” – Source
I guess they didn’t read the 2013 CFPB bulletin that described what abusive practices are.
On Tuesday the committee voted to approve their Financial CHOICE Act by a vote of 30-26 with all Republicans but one voting in favor and all Democrats opposed.
Consumers lose again.