On the day that a landmark federal agency – the Consumer Financial Protection Bureau – takes over enforcement of all major consumer laws, the Vermont Public Interest Research Group announced the results of a poll showing that an overwhelming majority of likely voters both support a new consumer agency (74%) and want Wall Street held “accountable” (77%). VPIRG also released a new report documenting “10 reasons” consumers need the new CFPB.
This week President Obama nominated former Ohio Attorney General Richard Cordray as the CFPB’s first director. But leading consumer groups warn that on Capitol Hill the CFPB continues to face fierce political opposition as “powerful Wall Street banks” oppose the bureau and have vowed to block the confirmation of any director.
“Having served as a Senate negotiator on the legislation creating the Consumer Financial Protection Bureau, I look forward to the appointment of the bureau’s first Director,” said Senator Patrick Leahy. “Once the Director is in place we can level the playing field for responsible community banks and credit unions and provide consumers with the tools they need to make the best possible financial decisions for themselves and their families.”
“The good news is that this week, there’s a new police department to protect consumers from predatory lending and financial tricks and traps,” said Paul Burns, executive director of the Vermont Public Interest Research Group. “The bad news is that Wall Street banks have asked their friends in Congress to defund and defang the bureau by denying it a director.”
Coinciding with today’s ‘transfer date’, VPIRG released a new national poll of 800 likely voters prepared for Americans for Financial Reform, AARP and the Center for Responsible Lending. Among the poll’s highlights:
- Nearly three-quarters (74%) of all likely voters support a “single agency with the single mission of protecting consumers” from unfair financial practices.
- Three-quarters of all likely voters (77%) want Wall Street held “accountable.” Support is diverse as the results included over two-thirds of Republicans (70%).
- Two out of three likely voters (66%), including nearly half of Republicans (49%), agreed that “We cannot get our economy back on track without strong financial reform.” Less than one-quarter (23%) agreed with the statement “The so-called Wall Street reform law is a job killer.”
VPIRG also released a new report, “10 Reasons We Need the Consumer Financial Protection Bureau Now.” Among its findings:
- The report documents that while the failure of federal regulators to prevent predatory mortgage lending is well known, it is less well-known that federal regulators also failed to stop unfair credit card tricks, overdraft fee schemes and the growth of triple-digit APR and payday loans, which are now imposing a crushing financial burden on many families.
- The report’s documents that these failures lead to the conclusion that consumer protection should be housed in one agency with just one job, protecting consumers from unsafe financial products, no matter where they buy them, at banks, payday lenders or other firms.
“Regulatory failures and the greed of the Wall Street banks caused a financial collapse that left millions without work, millions more without homes and the rest of us losing trillions of dollars in home values and retirement income,” said Burns. “The idea that an ordinary family who applies for a credit card or a mortgage ought to be treated fairly is just common sense to most Americans. The fact that too often today they aren’t being treated fairly is why we need a consumer cop on the beat.”
However, 44 Senate opponents of the CFPB, led by Minority Leader Mitch McConnell (R-KY) and Richard Shelby (R-AL), have sent the President a letter threatening to block “any” nominee to head the bureau unless its powers are rolled back and its funding weakened – in spite of Richard Cordray’s qualifications as a ‘tough sheriff’. In two years as Ohio Attorney General he recovered over $2 billion dollars wrongly looted by Wall Street firms and returned it to Ohio families, retirees and municipalities.
Legislation is expected on the House floor as early as this week to roll back the CFPB. HR 1315, the so-called “Consumer Financial Protection Safety and Soundness Improvement Act of 2011,’’ championed by House Financial Services Committee chair Spencer Bachus (AL), would gut the CFPB’s authority and eliminate its director, replacing the position with a politicized 5-member commission.
“Without a director, the CFPB won’t have the clout it needs to protect consumers and the Wall Street banks win,” Burns said. “So while we celebrate the new consumer bureau, we also warn that the Wall Street banks that caused the economic collapse oppose the consumer bureau, oppose the President’s nominee and want to go back to business as usual. That’s what got us into this mess and we need to keep fighting back.”