We're keeping busy promoting the CFPB's 4th birthday. Tuesday, July 21, marks four years to the day since the Consumer Financial Protection Bureau opened its doors to protect consumers and make financial markets work. CFPB was established by Congress just one year before that, with the July 21, 2010 passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in the wake of the financial collapse of 2007-2008, caused by a lack of adequate regulation.
- We've summarized some of the ways CFPB works for you on a new web page called "Meet the CFPB: Just Ten of the Ways It Works for You."
- Last week, we released the sixth in our series of reports analyzing the CFPB's Public Consumer Complaint Database, this one is called "Mortgages and Mortgage Complaints."
- Also, last week, along with other members of Americans for Financial Reform, we held a forum to mark the CFPB's birthday. The event featured my introduction of CFPB director Rich Cordray before his remarks, as well as an important announcement about the database by Darian Dorsey of CFPB's Consumer Response team and, finally, a panel of AFR experts discussing the CFPB's work. Read all about in a blog post by PIRG's Mike Litt. You can also watch the video archive here.
That announcement by Darian Dorsey? That CFPB was implementing yet another of our recommendations: The CFPB is now publishing a monthly summary of complaints, with features including “Top Ten Complained-About Companies.” In June, another of our recommendations became real as consumer narrative stories began to populate new complaints in the database. You can read the narrative stories here. If you provide your (optional) story, more consumers will learn about problems with your bank or credit bureau or other firm and that will help them make better choices. More on why we like the stories.
The CFPB has also posted its own birthday blog, "Four years working for you." It includes a link to an updated "CFPB by the Numbers" fact sheet as well as an embedded infographic. Here are a few of the numbers:
- $10.1 Billion: Approximate amount of relief to consumers from CFPB enforcement activity, including $2.6 billion in restitution to consumers; and $7.5 billion in principal reductions, cancelled debts, and other consumer relief;
- 17 Million: Consumers who will receive relief because of CFPB enforcement actions;
- 650,000+: Complaints CFPB has received as of June 2015
Although the "Four years..." blog entry has a lot of information about the CFPB, I recommend that people read a speech Director Cordray gave late last year where he clearly articulates the CFPB's strategic vision. First, he explained the scope of the CFPB's work:
"Whatever you may think of government regulation, it cannot work to oversee only part of the marketplace and leave other parts untouched. Some nonbank firms were overseen at the state level, but the resulting system was inconsistent and incomplete. Our aim, and our duty, is to change that. Accordingly, Congress gave the Bureau regulatory, supervisory, and enforcement authorities to fix these parallel and conflicting worlds of the banks and the nonbanks. This means that we can write the rules. We enforce those rules and all federal consumer financial laws. And, we supervise entities – we conduct internal examinations, visit institutions, require reports from them, and open up their books and operations to scrutiny."
He then went on to describe a key focus of the CFPB's work in solving obstacles to consumer "justice and dignity" that he called "the 4 Ds."
Robert F. Kennedy once said, “The challenge of politics and public service is to discover what is interfering with justice and dignity for the individual here and now, and then to decide swiftly upon the appropriate remedies.” Over our brief lifespan, the Consumer Bureau has observed some obstacles that interfere with justice and dignity for consumers – obstacles that we refer to as “the four Ds.” They are problems we see much too often: deceptive marketing, debt traps, dead end markets, and discrimination.
Perhaps the problems posed by three of these obstacles are clear: deceptive marketing, debt traps and discrimination. But what is a dead-end market?
A dead-end market is where consumers have no choices, where they cannot vote with their feet. A consumer can pick a new bank or credit union or even choose a payday lender. But a consumer has no choice when it comes to credit bureaus, powerful gatekeepers to financial (and employment) opportunity. And a consumer has no choice when it comes to dealing with a debt collector, especially one that's a murky debt buyer trying to collect an old debt it purchased from some other debt collector.
The CFPB's first monthly complaint report, released at AFR's event last week, listed Equifax #1 and Experian #2. These big credit bureaus led all types of financial firms in total complaints. We have seen the CFPB make important strides in bring the credit bureaus to heel, in particular by urging them (a rule was not even necessary, just a suggestion) to fully comply with the law by sharing consumer-provided backup materials with creditors during dispute reinvestigations. PIRG's report on debt collection complaints to the CFPB found that the number one complaint was: "It's not me." Monthly, as our new mortgage report and the CFPB's new monthly complaint reportshow: debt collection complaints as a category now lead the CFPB's totals. So while two credit bureaus came in #1 and #2, debt collection was the most-complained about category.
So you can see why the CFPB is working to fix these dead-end markets.
The director's speech in 2014 and his remarks to AFR members last week further explain the CFPB's priorities and progress toward meeting them. We're also encouraged by the CFPB's efforts to finalize a high-cost, small-dollar loan (payday, auto title and certain installment loans) rule and a rule restricting forced arbitration clauses in consumer contracts.
We'll continue to push back against efforts by the financial industry to weaken the CFPB. Take a look at our new page "Meet the CFPB: Just Ten of the Ways It Works for You" to learn more about it and why I often say that "The idea of the CFPB needs no defense, only more defenders."