The Next Director of the CFPB Must Continue Richard Cordray’s Work to Defend Consumers

Richard Cordray | CFPB

CFPB Director Richard Cordray will leave the agency at the end of the month.

Last week, Richard Cordray announced his resignation from the Consumer Financial Protection Bureau (CFPB), where he served for nearly six years as the agency’s first director. The CFPB is the only federal agency with the sole purpose of protecting consumers, an incredibly important function for all Americans in the wake of the financial crisis.

Under Cordray’s leadership, the consumer agency has helped put Latino families, and all Americans, on a path to greater financial security through its enforcement work. For example, about a dozen CFPB actions have been made against financial companies that demonstrate clear evidence of charging minority borrowers more for products. For example, in 2013, the CFPB ordered:

Altogether, the CFPB has returned about $12 billion in relief to 29 million consumers. We thank Cordray for this service and call for his replacement to defend and extend the bureau’s work to protect American consumers.

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CFPB’s Final Payday Rule is Released!

By Marisabel Torres, Senior Policy Analyst, Economic Policy Project, UnidosUS

We’re happy to be sharing some good news this week. UnidosUS is joining our advocacy partners in celebrating the Consumer Financial Protection Bureau (CFPB)’s release of their final payday rule!

Payday loans are loans in which the lender repays itself directly from the borrower’s bank account on the borrower’s payday. These loans are typically due in one lump sum. With a car title loan, the lender requires the power to immediately seize and sell the car as collateral, and uses this power to coerce payment.

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Happy Sixth Birthday, CFPB!

By Renato Rocha, Policy Analyst, Economic Policy, UnidosUS

Today, UnidosUS joins the consumer advocacy community as we celebrate the sixth anniversary of the Consumer Financial Protection Bureau (CFPB). The crippling effects of the financial crisis led to the creation of the CFPB, which we view to be one of the most important accomplishments of Wall Street reform. Six years ago, we made the argument that consumer protection is a civil rights issue––and we feel the same way today.

Since opening its doors, the CFPB has already curbed several unfair and deceptive practices in the financial marketplace. Over these last six years, the CFPB brought transparency to the remittance industry, stopped credit card companies from adding on products that consumers never agreed to, and required mortgage lenders to ask applicants for proof of their income before making home loans to ensure that homeowners can afford them. Just last week, the CFPB issued an important final rule that restricts forced arbitration, giving consumers a way to unite and hold corporations accountable for systemic misconduct. And we are waiting for the issuing of the final rule on payday loans, which will help curb the predatory lending that drains wealth from our communities.

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CFPB’s New Consumer Protection: Restrict Forced Arbitration

By Renato Rocha, Policy Analyst, Economic Policy, UnidosUS

The same week we announced our new name—UnidosUS—the Consumer Financial Protection Bureau (CFPB) issued a final rule that prohibits financial contracts from having forced arbitration clauses with class action bans. In effect, the new rule restores the right of consumers to come together in court by prohibiting class action bans, giving consumers a way to unite and hold corporations accountable for systemic misconduct.

Forced arbitration is a rigged system. Often, forced arbitration requires consumers to take a dispute to a private arbitrator chosen by the company, rather than exercise their right to have their complaint heard before a court. Given the association between the company and the arbitrator, forced arbitration causes considerable unfairness to consumers.

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Treasury’s Financial Regulation Report: A Wall Street Wish List

By Renato Rocha, Policy Analyst, Economic Policy Project, NCLR

This week the U.S. Department of the Treasury released a report to the president that outlines recommendations to rollback critical safeguards, including consumer protections that were put in place in the wake of the Great Recession. The Treasury report comes less than a week after the U.S. House of Representatives passed the Financial CHOICE Act, legislation that would deregulate financial institutions and expose our entire economy to a heightened risk of instability.

The Treasury’s proposals are straight from a Wall Street wish list, as the proposals effectively  gut the Consumer Financial Protection Bureau (CFPB).

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Latinos Overwhelmingly Support Consumer Protection

By Renato Rocha, Policy Analyst, Economic Policy Project, NCLR

In less than six years since opening its doors, the Consumer Financial Protection Bureau (CFPB) has brought transparency to the remittance industry, stopped credit card companies from adding on products that consumers never agreed to, and required mortgage lenders to ask applicants for proof of their income before making home loans. Its creation is one of the most important accomplishments of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Despite the CFPB’s hard work on behalf of American families, efforts are underway to dismantle the agency. One such attempt is the “Financial Choice Act of 2017,” House Financial Services Committee Chairman Jeb Hensarling’s vehicle to de-regulate the financial industry and dismantle the CFPB.

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Flashback Friday: The Payday Rule

By Marisabel Torres, Senior Policy Analyst, Economic Policy Project, NCLR

What a difference a year has made for consumers. A year ago today, consumer advocates celebrated the Consumer Financial Protection Bureau (CFPB)’s release of a proposed rule to reign in the worst abuses of payday, car title, and other high-cost debt trap lending schemes. For too long, predatory businesses targeted communities of color and other consumers who had limited access to credit with loans and promises of quick cash to help make ends meet. Because these businesses have been unregulated, they have gotten away with charging exorbitant fees and structuring their loan products to keep consumers in a cycle of debt. After hearing the countless experiences from consumers who were victims of these debt traps, the CFPB, an agency that was established with the sole mission of keeping the financial marketplace transparent and fair, stepped in and proposed a rule to stop these harmful practices.

Fast-forward to today: Congress stands poised to not only roll back the CFPB’s ability to regulate these businesses, but the very existence of the CFPB is threatened by an upcoming vote on the Financial CHOICE Act, H.R. 10. This legislation—dubbed the WRONG Choice Act by consumer advocates—will undo years of positive regulatory work intended to make sure payday lenders and other bad actors stay off the market, and that we don’t face the same conditions that led to the Great Recession.

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Trump’s First 100 Days: Weakening Consumer Protections for Student Loan Borrowers

By Amelia Collins, Policy Analyst, NCLR

The president proposed an ambitious student debt plan during the campaign last year. He called student loan debt an “albatross” hanging on the necks of borrowers, proposed a generous and streamlined repayment plan, and stated that the government shouldn’t “profit” off its student loan program. However, instead of using the first 100 days of his presidency to follow through on these promises, President Trump and Secretary of Education Betsy DeVos have rolled back crucial consumer protections for our nation’s 40 million student loan borrowers.

Let’s set the stage.

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The Financial Choice Act of 2017 Is the Wrong Choice for American Families

By Renato Rocha, Policy Analyst, Wealth-Building Project, NCLR

The reckless behavior of financial institutions including banks, credit card companies, and mortgage lenders caused the 2008 financial crisis that cost Americans millions of jobs, billions in taxpayer-funded bailouts, and trillions of lost retirement savings. A lack of consumer protections and oversight of the financial marketplace allowed unscrupulous lenders to target communities of color with unfair and abusive financial products. The Latino community was disproportionately impacted by the economic crisis and is still struggling to recover.

The devastating and widespread effects of the crisis led to the creation of the Consumer Financial Protection Bureau (CFPB), which we view to be the crown jewel of Wall Street reform. In less than six years, the CFPB has already curbed several deceptive practices in the financial marketplace: bringing transparency to the remittance industry, prohibiting credit companies from adding on products that consumers never agreed to, and requiring mortgage lenders to ensure that applicants can afford the home loans they’re seeking. The CFPB is also working on putting protections in place that would rein in predatory payday loans and debt collection practices. Each one of these actions have helped put all Americans on a path to greater financial security.

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D.C. Circuit Court Decision Is a Victory for Consumers

By Renato Rocha, Policy Analyst, Economic Policy Project, NCLR

Yesterday, the United States Court of Appeals for the D.C. Circuit agreed to rehear a case, PHH Corp. vs. CFPB, that would have seriously weakened the efficacy of the Consumer Financial Protection Bureau (CFPB).

Last October, a three-judge panel attempted to make it easier to remove the director of the consumer agency, allowing the president to fire the director at will. The full federal appeals court decided that it will revisit the issue at a hearing in May, effectively scrapping this earlier decision, and allowing the CFPB’s structure to continue as Congress intended.

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