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Advocates Speak Out as Consumer Bureau Faces Payday Predator Attack
Consumer groups, lawmakers highlight successes of Consumer Financial Protection Bureau
While the Consumer Financial Protection Bureau (CFPB) saw a recent setback in federal court as representatives of the payday loan industry won a legal challenge to the regulatory body’s funding mechanism, the fight is not over, and consumer advocates are pushing back.
The National Association of Consumer Advocates (NACA) released the following statement:
“The Fifth Circuit’s decision this week answered the call of opponents of vigorous consumer financial protection and who have long wanted to rob the CFPB of its independence and instead, relegate it to the often-messy congressional appropriations process and the heavy influences of well-financed corporate lobbyists.
The court’s disturbing decision, claiming that Congress does not have sufficient authority over the bureau because its funding does not come from the congressional appropriations process, is both deeply cynical and without any legal merit. Congress, following the 2007-2009 financial crisis, clearly and thoughtfully determined that the new financial regulatory agency it was creating, should have certain fundamental characteristics, including meaningful independence and funding under the Federal Reserve System, in the same vein as other federal financial regulators.
Congress determined that the bureau needs reliable and predictable funding to adequately monitor and protect the consumer finance market, as well as to respond to lawbreakers, such as the lenders who prey on American consumers with predatory high-cost loans – as is absolutely clear from the facts in this case.
Unfortunately, this week, the rule of law was distorted, and the Court issued a decision that simply favors politically powerful financial industry interests over the will of Congress, the public interest, and the millions of individuals and families that the bureau serves.
Despite this dangerous decision, the fight to preserve and maintain the bureau’s independence and its ability to achieve a fair, fraud-free financial marketplace is far from over.”
Payday lenders are pushing back as the CFPB has taken a tough stance against the industry and its often-usurious loan interest rates that trap borrowers in a cycle of debt.
Consumer advocates took to social media to highlight the successes of the CFPB in protecting consumers in the financial marketplace:
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