Consumer Financial Protection Bureau Under Attack in Congress

Since republicans have taken over Congress they have made slow but steady progress in dismantling all of President Obama landmark legislation. The next item on their list is repealing PayDay Lender rules that protect ordinary citizens from juice loan tactics for poor borrowers. Below is further proof that republicans are serious in hurting the nations poor:

Senator David Perdue (GA) introduced legislation today that would undermine the Consumer Financial Protection Bureau’s ability to effectively protect consumers by politicizing its budget through the congressional appropriations process, according to Consumers Union, the policy and mobilization division of Consumer Reports.

Senator Perdue’s bill is just the latest proposal being pushed by financial industry lobbyists and their allies in Congress to weaken the agency. Another bill introduced by Senator Deb Fischer (NE) in January would create more bureaucracy by replacing the CFPB’s director with a five-member commission, while a bill being drafted by Representative Jeb Hensarling (TX) is expected to essentially gut the agency by eliminating much of its authority and enforcement powers.

The very same lawmakers who fought creation of the CFPB, are now hoping to take both the bark and bite out of this critical consumer watchdog. These bills would cripple the CFPB’s ability to stand up to the big banks and predatory lenders and leave consumers vulnerable to financial scams and rip-offs.

Senator Perdue’s bill would give lawmakers control of the CFPB’s budget by subjecting it to the congressional appropriations process. Like other financial industry regulators, such as the Office of the Comptroller of the Currency, Federal Deposit Insurance Commission, and the Federal Reserve, the CFPB receives its funding independently from the congressional appropriations process. In the case of the CFPB, it receives a small percentage, subject to a statutory cap, of the Federal Reserve’s annual budget, which comes primarily from the interest it earns on government securities.

According to recent news reports, a memo by Representative Hensarling describing his legislation indicates that it would eliminate the CFPB’s authority to supervise banks, credit reporting agencies, and payday lenders. The watchdog would lose its ability to stop unfair, deceptive, and abusive practices, and would be stripped of the power to fine companies for breaking the law or order them to provide refunds to consumers cheated out of their money. The bill even blocks the CFPB’s authority to conduct education campaigns to help consumers make smarter financial decisions and would eliminate the public’s ability to file complaints with the agency and get help resolving them when they’ve been mistreated.