Tell me why the CFPB is a disaster

In the current fued over who should lead the US Consumer Financial Protection Bureau, what should be focused on is why the President and Republicans are calling the CFPB a “joke” or a “disaster.” This agency has penalized banks, credit card companies, lenders, etc. almost $12 billion for aggressive marketing practices, selling products people did not ask for and outright fraud.

Over 90% of this money goes to the affected customers who have been cheated. A good example is Wells Fargo being fined $150 million for setting up accounts for people that did not authorize them, so employees could meet a bonus goal. Another is Bank of America being fined over $780 million for selling services customers did not ask for. Other brand name organizations have also been fined for bad practices.

The organization has also helped over 29 million people with issues and education on financial matters. Since, financial issues are complex and so many were harmed during the housing crisis, the CFPB seems to be a big help to everyday Americans.

The reason for the comments by the President and Republican legislators¬†is the CFPB is working too well and banks don’t like this. It is far from a joke or a disaster, so reporters need to ask the speaker of such a comment as to why they say this? The pat answer is the CFPB has too much authority and too little oversight. Yet, it was set up to be removed from the political process for these reasons. Banks, et all don’t want to be fined for their business practices, so they fund politicians to diminish the CFPB’s clout.

My strong advice to banks is to stop screwing people over and maybe you won’t get fined. Stop selling people products they don’t understand such as variable or pick-a-payment mortgages. Stop selling them products and services they did not authorize. My sister is dealing with one of these banks right now on a credit card account she did not open.

So, Mr. President tell me again why the CFPB is a disaster? And, tell me how attacking this organization helps those voters who put you in office? To be brutally frank, when this President uses the word “disaster” it usually means he is being untruthful about something.

 

12 thoughts on “Tell me why the CFPB is a disaster

    • Hugh, it should not be wishful thinking. Mulvaney said he and Trump feel this agency is “harming capitalism by squelching credit.” Experts on NPR Market Watch had trouble with their comments. Helping people with getting credit and not be screwed by banks is a good thing. Governing is hard enough with real data and truth. It becomes much harder to solve problems when they don’t.

      By the way before becoming a Senator, Elizabeth Warren, a bankruptcy expert met with a big bank on helping people with debt. She was asked to leave when the CEO said that is how we make money. Thanks, Keith

  1. Note to Readers: I feel badly about focusing so much on our US problems. There is an obvious location bias. Yet, the above post is one more example of why politics under this White House and Congress is so frustrating. Let’s take a highly functioning entity that protects people and try to unwind it because the companies being punished for their actions don’t like it. Money talks and the folks listening are in power.

  2. Good information, Keith. I suspect many people do not even understand quite what CFPB does and therefore will simply accept what Trump says, thinking it does not affect them. It DOES, though … it affects all of us. What Trump means when he calls it a disaster is that it is a disaster for the pockets of those rich donors who have lined his pockets and are now impatiently tapping their collective feet, waiting for him to get rid of the regulatory agencies.

    • Jill, when now Senator Elizaberh Warren explained the CFPB to people it became an easy sell. As you point out, Trump followers don’t recognize how often he lies and how little he knows. Keith

  3. Note to Readers: When you think of what Trump and other Republicans call the CFPB, please think of these stories who the CFPB helped:
    – older people who were convinced to buy an annuity with no death benefit with all of their money;
    – people whose bank accounts were paying for fees on ancillary products that they did not authorize;
    – people whose bank set-up accounts in their names or sold them insurance they did not need; and
    – the language now required on credit card statements about how long it would take to pay it off with the minimum payment versus a suggested amount.

    There is a study called Class Matters that concludes people in a lower economic class ask fewer questions of financial advisors. They are more prone to be taken advantage of. We need the CFPB to help these people.

    • Roger, it is sad to say that about a President, but that is a reasonable conclusion. As I have said several times, I start with not believing a word he says as the odds are in my favor. Keith

  4. Ya, well, wasn’t it last week that #45 was crying about Wall Street’s disaster? And this morning I read that the Dow has broken a record high in anticipation of the gleeful corporate tax cuts. The rich get richer while those w/o a portfolio sink lower and lower. Few who stand to benefit from corporate greed concern themselves with what happens down the line to those being raped by their local banks. And YET, those at the bottom are still champion the emperor.

    • Linda, see Roger and my back and forth. A corollary to the two rules of thumb we discussed is if Trump claims something is a “disaster,” take it to the bank that he is lying. Keith

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