Consumer Financial Protection Bureau Director Richard Cordray spoke today at the the CFPB Advisory Board's first meeting of 2013. He discussed the CFPB's current priorities, including unequal access to credit for minorities, deceptive marketing of consumer financial products, and debt traps. He also touched on the Bureau's efforts to be transparent, to respond to consumer complaints, and to develop consumer-friendly tools to provide information to consumers. His prepared remarks are posted here.
Quote: “…So, to repeat, where does the Bureau go with this? Toward increased regulation of the entities that don’t contract with consumers? In that case, why mention the banks? Or to holding banks responsible? We will see.”
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In my humble opinion, I think that holding banks responsible for their action (such as selling personal data to a debt collector) is a logical extension. This action appears to be closely related to an entity putting a contract out on someone and it often has the same effect: that of destroying the person targeted.
Since banks get very little return for such sales, it might be more equitable to offer the debtor the same opportunity, at least for a first or a second time offender. The debt-collector hounds could be released upon repeat offenders after prior warning. Encouraging financial crime is not the answer but neither is destroying people who are in genuine trouble.
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