Consumers First: Why the Consumer Financial Protection Bureau Matters
Nana Adjeiwaa-Manu is a former Research and Writing Fellow at the Center for Global Policy Solutions. She is interested in identity, social support systems, and the connection between health and wealth. Nana holds a bachelor’s degree in Sociology and African & African-American Studies, and will be pursuing a Ph.D. in Sociology this fall. You can follow her on Twitter @AdjeiwaaKodyie.
The Consumer Finance Protection Bureau (CFPB), an independent agency of the United States government, issues and enforces rules to ensure that consumer finance markets work and allows consumers to retain control of their economic lives. The Bureau puts consumers first, serving as the public’s advocate when one of the three branches of government makes a decision that impacts the economic well being of consumers. Through staying informed about changes in economic policies around lending, the agency holds the government accountable for its actions.
Unfortunately, the CFPB is in jeopardy. This week, the House Financial Services Committee is considering the Financial CHOICE Act (H.R.10), a bill introduced by Committee Chairman Jeb Hensarling (TX-5) that would substantially weaken the CFPB and its ability to tackle predatory business practices. Under the legislation, the CFPB would be renamed the Consumer Law Enforcement Agency, reporting to the Office of Information and Regulatory Affairs and receiving its funding from Congressional appropriations. This change would strip the Bureau of its independent status, effectively rendering it a part of the executive branch. Further, the Bureau would lose its rule-making and enforcement authority to monitor payday and title loans or restrict arbitration. Even worse, the legislation would no longer require the Bureau to maintain its consumer complaint system, which gives the public the ability to call out what they see as unfair practices. A weaker CFPB means less protection for consumers, regardless of their race, gender, or income level.
External oversight of businesses is key to developing a more equitable economy. The CFPB provides such oversight in the digital age through monitoring predatory practices in the FinTech industry. In November 2015, for example, the CFPB filed a lawsuit against the now-defunct online lender Integrity Advance and its leader “for deceiving consumers about the cost of short-term loans.” This lawsuit shows that the CFPB is committed to protecting consumers by taking action against predatory lenders. Legislation to weaken this crucial agency does a disservice to consumers, leaving them economically vulnerable. In light of the accountability that the CFPB’s consumer-focused advocacy provides, Congress should block any legislation that threatens consumers’ economic well-being, empowerment, and security.