Consumer Financial Protection Bureau Open for Business, GOP Attacks Continue
by Marc Granowitter | July 29, 2011
Last Thursday, one year after President Obama signed the “Wall Street Reform and Consumer Protection Act” (Dodd-Frank) into law, the Consumer Financial Protection Bureau (CFPB) officially opened for work. The CFPB protects consumers’ financial transactions by ensuring a fair, transparent, and efficient marketplace for many important financial products, such as credit cards, student loans, and credit scores.
President Obama signed the Dodd-Frank financial reform in response to the problems that caused America’s economic crisis and worst recession since the Great Depression. President Obama said, Dodd-Frank helped in three ways:
"First, it made taxpayer-funded bailouts illegal, so taxpayers don’t have to foot the bill if a big bank goes under. Second, it said to Wall Street firms, you can’t take the same kind of reckless risks that led to the crisis. And third, it put in place the strongest consumer protections in history."
The CFPB is helpful for working families because it simplifies legal fine print and requires easy-to-understand descriptions of financial products’ prices and risks, enabling consumers to easily compare those products before making purchases. This helps consumers both with small daily transactions, such as increasing transparency of credit card practices, and with large, once-in-a-lifetime transactions, such as streamlining home mortgage disclosure forms. The CFPB also reduces businesses’ ability to use deceitful, abusive, or harmful practices.
Last week, President Obama nominated Richard Cordray, former Ohio Attorney General, to be Director of the independent CFPB. Cordray currently leads the CFPB’s enforcement division, and he’s been a longtime advocate for working families. In Ohio, he helped recover $2 billion from businesses like Merrill Lynch and A.I.G, including pension funds for retirees, and he was one of the earliest fighters against abusive home lending practices and mortgage foreclosures.
As if we didn’t already know where their interests lie, Congressional Republicans are doing their best to defund the CFPB and weaken its ability to protect consumers. On July 21, the House voted largely along party lines to approve H.R. 1315, which would weaken CFPB and narrow its oversight and enforcement authority. House Republicans also want to reduce CFPB’s budget.
President Obama has said he will veto both efforts if they come to his desk. AFSCME also opposes these efforts and joined with more than 50 national and state-based organizations to send a letter to Congress opposing H.R. 1315.
