House Financial Services Committe Minority Staff Issues Report on CFPB

The report is titled THE CONSUMER FINANCIAL PROTECTION BUREAU IN PERSPECTIVE. Quoting now from the findings listed in the Executive Summary:

  1. Before the Consumer Bureau was created, financial regulators prioritized the profits of Wall Street firms at the expense of consumers’ financial well-being on Main Street. Previously, Federal prudential regulators were tasked with dual, and often conflicting, duties of supervising the safety and soundness of financial institutions while also ensuring compliance with consumer protection laws. This fragmented and conflicted regulatory framework resulted in regulatory arbitrage and lax enforcement of consumer protection laws.
  2. Despite relentless * * * attempts to undermine and gut the Consumer Bureau, it has effectively carried out its mission of holding predatory actors in the financial sector accountable for ripping off their customers and protecting all consumers from unfair, deceptive, or abusive acts and practices. The Consumer Bureau, through its enforcement actions against bad actors, has returned nearly $12 billion to 29 million consumers.
  3. Contrary to * * * arguments that it is ideologically driven, the Consumer Bureau has consistently proved that it operates in a nonpartisan, fair, and data-driven manner. For example, the Consumer Bureau conducted an exhaustive review of the use of mandatory pre-dispute arbitration agreements in consumer financial contracts, including a consumer survey, requests for stakeholder input, roundtables, and extensive consultation with other regulators. This deliberative work culminated in a 728 page report that informed its decision that a rule banning these harmful clauses was in the public’s interest and was needed to protect consumers.
  4. The Consumer Bureau is an independent watchdog that is fully responsive to the wide-ranging challenges confronting an increasingly diverse consumer demographic, and is not beholden to special interests or partisan whims. Consumers now know their concerns will be taken seriously when they turn to the Consumer Bureau. More than 1.2 million consumer complaints have been submitted to the Consumer Bureau, with 97 percent receiving timely responses from companies. The public nature of the database helps to promote fairer treatment of consumers by financial companies and to strengthen market discipline.
  5. The Consumer Bureau’s frequent testimony before Congress, semi-annual reports, and good faith responses to Congressional oversight demands, even the most unjustified, have demonstrated it is fully accountable for its actions. Since it opened its doors, the Director of the Consumer Bureau and other senior officials have testified before Congress 63 times.
  6. The conduct of [certain members of Congress] towards the Consumer Bureau under the guise of “Congressional oversight” is designed to undermine the agency’s primary mission: protecting consumers from predatory financial actors and ensuring markets for consumer financial products and services are fair, transparent, and competitive. Committee [members] have initiated dozens of “investigations” of the Consumer Bureau since January 2014, forcing it to produce more than 170,000 pages of documents for the Committee in response to over 90 letters of inquiry; unilaterally issued 20 subpoenas to the Consumer Bureau; and compelled several of the Consumer Bureau’s former and current employees to sit for over 40 hours of depositions.
  7. Although the Consumer Bureau’s arbitration rule is a case study in thoughtful, effective rulemaking, it immediately became the subject of unfair partisan attacks * * * in Congress and the Acting Comptroller of the Currency. The Dodd-Frank Act directed that the Consumer Bureau study mandatory pre-dispute arbitration clauses in consumer contracts and to issue a part of this review, the Consumer Bureau completed a thorough 728 page study, which noted that millions of consumers are subject to forced pre-dispute arbitration clauses in their contracts for consumer products or services. The Consumer Bureau rightly concluded that these clauses restrict consumers’ ability to get relief in disputes with financial companies by limiting their ability to pursue class-actions. As a result, the Consumer Bureau has moved to ban these contracts. However, the final rule is now unfairly under attack * * * who have threatened Director Corday with contempt, made through the Congressional Review Act, all so they can deny ripped off consumers their day in court.

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