In a recent press conference, White House Press Secretary Sean Spicer bashed the Consumer Financial Protection Bureau, heightening already-raised questions as to whether the agency’s director would last in a Trump administration.
“[Dodd-Frank] imposed hundreds of new regulations on financial institutions while establishing an unaccountable and unconstitutional new agency that does not adequately protect consumers,” said Spicer, referring to the CFPB, which launched in 2011 as Elizabeth Warren’s brainchild.
However, Spicer demurred when asked whether President Donald Trump would attempt to oust the agency’s current director Richard Cordray before the completion of his five-year term in 2018, or what elements Trump would seek to keep.
Currently, Trump only has the power to fire Cordray for cause, after a court decision that deemed an unfireable-for-any-reason single-director structure was unconstitutional. But a leaked memo reported by the New York Times showed that Rep. Jeb Hensarling (R-TX), chair of the House Financial Services Committee, has plans to move forward with legislation that would significantly declaw the agency.
This is not the first time Hensarling has targeted the CFPB. He has put forth legislation called the Financial Choice Act that would change the agency’s name to “Consumer Financial Opportunity Commission,” reduce its powers to hold companies accountable for deceptive conduct, and establish an SEC-like five-member commission instead of a single director that CFPB advocates say is essential to its efficiency and quick action.
According to the Times, Hensarling’s memo steps back from the Financial Choice Act, which advocates a commission structure, and proposes that the president can yank the director at any time. The legislation would also reduce the agency’s power to make rules and punish companies with fines and other enforcement actions.
“This new version of the Chairman’s Wrong Choice Act is even worse than the original,” said Rep. Maxine Waters (D-CA), the ranking Democrat on the House Financial Services Committee, about the memo. “This bill makes it crystal clear that Republicans mean to disarm our consumer protections, expose the American public to financial predators, and ultimately steer us in the direction of another Great Depression.”
For Trump voters, who were promised a populist vision that puts interests of ordinary families above big corporate business, it may be confusing politically to square killing the agency. The problem? CFPB’s record. By the numbers, the agency has thus far accomplished goals of fighting harmful business practices and helping to protect working people from deceptive and unfair business:
Almost $12 billion has been returned to wronged consumers since the CFPB’s inception. Around $7.7 billion of that comes from canceled or reduced debts after an action by the agency, but $3.7 billion comes from exacting money from companies that engaged in illegal practices.
The CFPB doesn’t just return money back to consumers who were taken advantage of—the agency fines offending companies and puts the proceeds into a fund used to educate or pay other wronged consumers if the offending party has no money to pay redress. As of Feb. 7, $589 million has been paid in.
As of Jan. 1, 2017, the CFPB has given consumers a direct line to an agency that will listen, and has fielded over a million consumer complaints. After a complaint has been submitted, the company can respond, and its response is published in a large, public database. If the company does not respond after 15 days, the complaint is published alone. There is a 97% quick response rate, according to the bureau.
27% of the complaints are about debt collection
The most common source of complaint is in debt collection, closely followed by mortgage related problems, which made up 24% of complaints.
29 million people
Have received relief after a CFPB enforcement action. This is 9.1% of the total population in the US—including children.
The amount of consumer relief won by the CFPB against JPMorgan Chase (JPM). The bureau, along with 47 states, took action against the bank in 2015 for violating Dodd-Frank’s prohibitions of unfair, deceptive, or abusive acts and practices like robo-signing for debt collection and selling bad mortgages.
Taxpayer funds used by the CFPB. The agency is not funded by the taxes but rather by the Federal Reserve, which gets fees from financial institutions.