Watch your wallet, because Congress is coming after the federal watchdog set up, following last decade’s financial crisis, to police against rip-offs of borrowers and buyers in the wilds of American commerce.
Dubbing the Consumer Financial Protection Bureau “a rogue federal agency” and claiming its law enforcement harms Americans’ ability to borrow money, Texas Rep. Jeb Hensarling, chairman of the House Financial Services Committee, proposes to shut it down and, first, eject its director, Richard Cordray.
Why? Because by all accounts Cordray, the former attorney general of Ohio, has become too effective—securing important wins and pushing tough fights for consumers at a price that law-breaking financial firms don’t care to bear.
Like fining the Wells Fargo bank $100 million last year for its notorious practice of opening hundreds of thousands of secret accounts in customers’ names without their knowledge, carried out by staff hustling to meet sales targets and earn bonuses.
Like fining mortgage lenders for taking illegal kickbacks in exchange for referrals from real estate brokers or for steering borrowers into higher-interest mortgages—the kind of maneuvers that stuck borrowers with unpayable loans in the real estate bubble.
Like shielding millions of student loan borrowers from costly debt-relief scams and corner-cutting billing companies.
Like this month ordering earlier Russell Simmons debit card operation UniRush, along with MasterCard, to refund consumers $10 million and fining the companies $3 million more for harm done during a 2015 system breakdown that left tens of thousands unable to access their accounts.
Like teaming up last week with New York Attorney General Eric Schneiderman to sue a settlement-advance firm for ripping off sickened 9/11 recovery workers and former NFL players entitled to compensation after suffering concussions on the job.
All vital work that, before the creation of the CFPB in the 2010 Dodd-Frank financial reform law, no federal official had the will and wherewithal to do.
A Hensarling memo plotting strategy to gut Dodd-Frank reveals plans to severely scale back the bureau’s enforcement powers and allow the director, whose five-year term lasts until 2018, to be fired at will.
Surely that has nothing to do with the megabucks the congressman’s campaigns raise from the very financial firms the CFPB targets.
Separately, the Texas congressman advertises a game plan to kill the bureau outright and roll the clock back to the days pre-Dodd-Frank, when consumers were sitting ducks for unscrupulous lenders barely reined in by banking regulators.
To bleed the consumers’ top cop to death or to execute it by firing squad: such is the unacceptable choice looming before Congress.
All Americans who’ve ever had a mortgage or a credit or debit card or a student loan should call their representatives in Congress and insist, loud and clear: This transaction will not go through.