Ed's Blog

CFPB hearing today in House, expect more attacks

By Ed Mierzwinski
Consumer Program Director

The House Financial Services Committee will hear (live video also) the Semi-Annual Report of the Consumer Financial Protection Bureau at 10am, from its director Richard Cordray. The Politico's Morning Money quotes chairman Spencer Bachus (AL), who appears to already have made up his mind that consumer protection is a bad idea. 

“[M]any question [the agency’s] decision to release raw, unverified complaint data to the public. Rather than help consumers, publicly disclosing unverified information could instead mislead consumers ..."

The "many" he refers to are all soldiers in the phalanx of bank lobbyists with encampments from the Congress all the way down Pennsylvania Avenue and other streets where bank regulators are trying to do their jobs. Several other consumer protection agencies, from the CPSC (toys, cribs, household products, bicycles) to NHTSA (cars, tires)  to FDA (medical devices, drugs), already have such a publicly-accessible database of consumer complaints. The transparency helps consumers make choices about products that are best for the safety of their families and now, their wallets. The public shaming forces companies to respond to consumers and actually investigate problems. It is an idea that works. Of course, the "many" bank lobbyists don't like it.

Meanwhile, a key subcommittee chairman, Randy Neugebauer (TX), has a long polemic in today's Wall Street Journal attacking the CFPB, too: 

"Despite the bureau's broad powers, it is not subject to any of the traditional oversight powers of Congress, particularly the "power of the purse," which is the cornerstone of the appropriations process."

Well, Mr. Chairman, neither are the FDIC, the Fed, or the powerful but obscure bank regulator known as the OCC. And there's a reason for it. Bank regulators responsible for our financial system should not be subject to the political influence-peddling of the Congressional Appropriations system, where powerful special interests have vast power to eviscerate an agency's ability to enact public portections and enforce laws.

They don't appear interested in oversight. They appear to have already made up their minds. Here's our summary of some of the good work that the CFPB has already accomplished in its first year and is still doing. And, since July, when the CFPB dinged the Capital One credit card company for allegedly illegally taking money out of your wallet and required it to return $140 million in restitution, other banks have started to clean up their evil ways, too. The CFPB works and it works for both consumers and companies that play fair.

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