AFR applauds CFPB steps to bring greater fairness and transparency to the auto lending market, which they did today by hosting a field hearing focused on auto finance issues. The CFPB also announced details on a proposed rule to bring auto lenders under its oversight; a crucial step toward creating a fairer and more transparent auto lending market for consumers.
Americans for Financial Reform, California Reinvestment Coalition, National Fair Housing Alliance, National People’s Action, New Economy Project, and Woodstock Institute praised the CFPB for proposing “a number of positive steps to improve the range and detail of mortgage application and lending information available to financial regulators and the public.” This kind of data, the statement says, “is crucial for regulators and the public to understand the mortgage market, who does and does not have access to credit, and on what terms.”
“Public access to consumer complaints can help individuals make smart decisions upfront. Consumers will be able to draw their own conclusions from the data. Those who identify a company with disreputable lending practices or poor complaint resolution will be in a position to harness the power of the purse to protect themselves. Businesses with good products and customer service will benefit, and academics, researchers and others will be able to help the agency spot harmful trends and patterns before they become widespread.”
AFR and more than fifteen organizations submitted a letter to members of the House Financial Services Committee, calling on them to defend the CFPB from specific legislative attacks.
Five-and-a-half years after the financial crisis, “the great majority of Americans still see a need for tougher regulation of Wall Street and the lending industry, and welcome the existence of a federal agency with a mandate to police rules of fair play in the consumer finance markets.
“At the House Financial Services Committee, however, a different view has taken hold. The big threat, many on that committee seem to believe, comes not from abusive practices in the financial industry, but from the agency that is beginning to do something about them.”
Consumer and civil rights advocates applaud the CARD Act’s success in saving Americans billions of dollars in predatory and excessive fees. By one estimate, the Act has saved consumers $12.6 billion; a recent report from the Consumer Financial Protection Bureau identifies nearly $4 billion annual savings in fees alone.
In addition to taking consumer complaints (about mortgages, credit cards, student loans, bank accounts, credit reporting, auto loans, debt collection, payday loans, and money transfers, among other topics), the CFPB offers a variety of additional resources for consumers seeking to learn more about their rights in the financial system.
AFR submitted a comment to the Consumer Financial Protection Bureau offering some suggestions on how to strengthen their proposed rule on defining “larger participants” in the international money transfer market. This proposed rule, if adopted, would be the fourth in a series of rulemakings to define ‘larger participants’ in various consumer financial product markets. AFR’s recommendations include expanding the criteria CFPB uses to define larger participants, and covering domestic as well as international money transfers under their supervisory purview.
AFR and more than 100 consumer, civil rights, labor and community organizations submitted a letter to the CFPB urging the Bureau to issue a strong rule to address unfair, deceptive or abusive practices in the payday and small dollar loan market.
The Consumer Financial Protection Bureau’s latest report on payday lending reaffirms what the Bureau’s initial research showed a year ago: these ultra-high-cost loans, while promoted as a form of emergency credit, consistently lead to a cycle of debt. Even after paying substantial fees, many borrowers end up “owing as much or more on their very last loan as the entire amount they had borrowed initially,” CFPB Director Richard Cordray pointed out.