“We got organized… We started getting groups like – God bless ‘em – AARP, Consumer Union, the AFL-CIO, the NAACP, LaRaza… More than a hundred groups got organized into Americans for Financial Reform. They pushed, and we got that consumer agency passed into law.” – Senator Elizabeth Warren, describing the struggle to establish the Consumer Financial Protection Bureau.
“We are writing to urge your opposition to the following series of bills, which are expected to come up for a vote in the House of Representatives the week of April 13th. Many of these bills would undercut important protections on mortgages, and re-open the door to higher fees and other practices that contributed to the devastating housing crisis. Others would undermine or put barriers in front of the important work of the Consumer Financial Protection Bureau (CFPB), and are part of a strategy to weaken the CFPB and disrupt the good work the Bureau is doing preventing financial tricks and traps.”
“First, for a loan to be fair, the borrower must have the ability to repay… Second, the Bureau has recognized that this crucial principle… must apply to a sufficiently broad range of small-dollar loans, and not just to a narrowly defined set of payday or car- title loans. Otherwise, abusive lenders will do what they have done in many of the states that have tried to crack down on such abuses: find ways to evade the rules without giving up their basic debt-trap approach.”
At a CFPB hearing in Richmond, Va., AFR delivered a letter in which a remarkable array of civil rights, faith, economic justice, elder, community and civic organizations – 500 altogether, including groups from all 50 states – applaud the CFPB for its commitment to this issue and urge it to develop and implement regulations that finally put payday, car-title and other small-dollar lenders “on the same footing as other lenders, requiring them to play by the rules and make fair loans.”
AFR sent a letter to members of the House Financial Services Committee, urging them to oppose a number of the bills being included in today’s markup. The bills opposed by AFR would undermine the CFPB and help return us to an environment of predatory lending, irresponsible underwriting, and excessive fees that paved the way for our recent devastating housing crisis.
“Few practices are as abusive, unfair, and deceptive as the widespread use of forced arbitration clauses in most consumer contracts, including credit cards, student loans, debt settlement, credit repair, auto financing, and payday loans. Forced arbitration funnels consumers into a private system set up by corporations to protect and hide harmful and unlawful corporate behavior.”
“While the [proposed] rules are generally strong, we offer several suggestions below for strengthening the rules and closing loopholes. In particular, the CFPB should ban all overdraft fees; apply credit card protections to all credit transferred to a linked prepaid card; and limit fees before account opening and beyond the first year. We also urge the CFPB to require prepaid card funds to be held in accounts protected by deposit insurance and to adopt stronger rules to prevent coercive use of payroll, public benefit, student, released prisoner and other prepaid cards.”
“Republicans in the House of Representatives have come out with a budget proposal that, while vague on many points, is all too specific in its attack on Wall Street regulation, the Dodd-Frank Act, and the work of the Consumer Financial Protection Bureau. The proposal would tie financial (and other) regulators up in procedural knots… In addition, it would eliminate a key mechanism for the safe unwinding of a big bank in the event of failure; undermine the ability of regulators to detect and curb systemically dangerous practices; and end the independent funding of the Consumer Financial Protection Bureau.”
“There should be no mistaking the intent or inevitable effect if this change were actually made: it would cripple the first and only financial regulator with a mandate to put consumers’ interests first… The result would be a green light for more of the tricks and traps that characterized the banking and lending world for too long, and that the CFPB is working to clean up.”
“For the first time, consumers will be able to learn the details behind complaints against a company filed with the CFPB. In addition to searching by product, company, and complaint category, consumers will be able to discover what the real problem was that motivated someone to complain… Researchers and companies will be able to better analyze marketplace practices that are posing the most difficult problems.”