Hey Ted, Americans Really Do Needs the Consumer Financial Protection Bureau
Sen. Ted Cruz (R-Texas) last week marked the fifth anniversary of the founding of the Consumer Financial Protection Bureau (CFPB) by calling for its abolishment.
The CFPB, an independent government agency tasked with protecting consumers from predatory and unethical banking practices, was formed as a part of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010. Congress passed the law in an attempt to prevent big banks from again wrecking the economy with their reckless gambling and greed.
So what the presidential hopeful was really saying in calling for the dismantling of the CFPB was that big banks should go back to doing whatever they want and working people should simply fend for themselves.
Big banks and the Republicans they fund hate the CFPB because it exists to keep financial institutions from fleecing customers and padding their profits by taking careless risks.
They also hate it because it’s working.
On July 21, the same day Cruz was promising to kill consumer protections, the CFPB ordered Citibank to pay $700 million for cheating 8.8 million customers through illegal credit card practices.
The next day, the CFPB announced it was taking action against Discover Financial Services over their illegal student loan practices. The company will now pay at least $18.5 million for allegedly cheating more than 100,000 borrowers who took out private student loans.
And earlier this month, JPMorgan Chase & Co agreed to pay $136 million to settle allegations that it violated regulations on the collection and sale of credit card debt. This after the CFPB ordered JPMorgan to pay $309 million in September 2013 over charges that the company billed consumers for credit monitoring services it, in many cases, never provided.
In total, the CFPB estimates that it has helped 17 million consumers by providing $10.1 billion in relief, overseeing not just credit cards and student loans, but also regulating mortgage practices, payday loans, and other financial transactions.
Big banks would love nothing more than to go back to policing themselves, and Republicans like Cruz seem more than happy to let them.
But consumer protections aren’t just about preventing another financial meltdown—although that is important. The CFPB is necessary for protecting the interests of everyday Americans who need to work within the banking system but too often have little or no recourse when that system becomes corrupt.
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