Consumer Bureau Under Attack
The oligarchy is not too happy with an effective regulator
The payday lending industry has made no secret about its unhappiness with the Consumer Financial Protection Bureau (CFPB) - a pro-consumer regulatory body free of the confines of congressional funding oversight.
In fact, payday lenders have been in court, fighting to defund the CFPB in order to prevent effective regulation of an industry that protects consumers and seeks to rein-in payday predators and other bad actors.
Unfortunately, recent news suggests that the CFPB may be in trouble - and that payday predators may gain more license to roam free.
Here’s a sampling of the responses to a recent 5th Circuit Court of Appeals decision that calls the CFPB’s funding mechanism into question:
Public Citizen:
The Fifth Circuit’s dangerously misguided and outrageous decision jeopardizes the most important consumer protection agency created in the last 50 years and the rules, guidelines, enforcement actions and consumer education that the Consumer Financial Protection Bureau has issued and undertaken.
The Fifth Circuit’s decision ignores long-established and long-accepted practice of funding financial regulatory agencies, and the prior review of many other courts, in order to decree that the funding mechanism of the CFPB is unconstitutional.
If upheld, this decision is a gift to scammers and rip-off artists, payday lenders and Big Banks. If it stands, it will go down in history as one of the most anti-consumer court rulings in history.
Student Borrower Protection Center:
“For more than a decade, the CFPB has taken on big fights with powerful financial companies and stood up for working people. Because the Bureau has been so effective, it has become a favorite punching bag for Wall Street and their army of lawyers and bought-and-paid-for judges. Today’s decision has nothing to do with fairness or justice—this is a raw game of reactionary politics played by people who want to keep families trapped in debt.”
U.S. PIRG:
“The appeals court ruling ignores the fact that every banking regulator in our country has had an independent source of funding. This precedent goes back to the 1800s to inoculate regulators and the economy, which is uniquely reliant on banking, from the undue influence of politics.
“Otherwise, members of Congress who are funded by the banking industry could threaten to withhold funding from banking regulators unless they do their bidding.
“Congress created the CFPB in the wake of the 2008 economic crash and set it up for success by making sure it could serve consumers without being manipulated by the very industry it is meant to rein in.
“Making the CFPB the only banking regulator subject to Congressional appropriations would put the most pro-consumer federal agency at risk of being starved of the funding it needs to protect consumers.”
Senate Banking Committee Chair Sherrod Brown of Ohio:
“Today, the Fifth Circuit chose to favor Wall Street over consumers. After more than a decade of coordinated and sustained attacks on consumers, and repeated failures to weaken the CFPB, big corporations and anti-consumer interests have turned to the courts to incapacitate the only financial agency that specifically looks out for consumers. Congress deliberately ensured the independent funding of the CFPB, so that the consumer watchdog could protect consumers and help create an economy that centers working families. It is not a coincidence that, while other financial regulators like OCC, FDIC, NCUA, and the Federal Reserve all have independent funding structures, Wall Street chose to attack the one financial regulator charged with protecting consumers. Today's decision is another attack on consumers, but I will fight to ensure the CFPB will keep the authorities granted by Congress.”
Americans for Financial Reform:
“Ever since the CFPB’s creation more than a decade ago, predatory lenders, Wall Street, and big banks have been singularly focused on using whatever tactic they can to undermine and limit its authority,” said Elyse Hicks, consumer policy counsel at Americans for Financial Reform Education Fund. “That’s because the Bureau has done exactly what Congress set it up to do – enforce the law and write rules and regulations against abusive practices, all while putting billions back in consumer’s pockets. Abusive financial companies don’t like it because they want to keep profiting from treating people unfairly; this court went to absurd lengths to take their side.”