Two years after President Obama nominated him to be Director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray was confirmed on July 16 by a vote of 66-34.
Cordray’s confirmation had been blocked by Republicans seeking to weaken the part of the Dodd-Frank Act that established the CFPB and charged the agency to regulate and protect consumers’ financial products, from student loans to mortgages to credit cards. GOP politicians contended that the CFPB had too much power and sought changes including yearly Congressional approval of the agency’s budget and the replacement of its director (who is appointed by the President) with a board.
Republicans have almost nothing to show after their two-year fight to block Cordray’s confirmation, Politico comments. Even Senator Lindsay Graham has admitted that Republicans made a mistake in their sustained campaign to block Cordray’s being confirmed.
Their loss is a win for consumers. Thanks to the CFPB, and through protracted dissension about its very existence, credit card companies have faced a crackdown on their deceptive marketing tactics and been forced to refund more than $400 million to six million customers. Service members and their families will be refunded about $6.5 million thanks to the CFPB keeping auto lenders from engaging in deceptive marketing and lending practices that specifically targeted active-duty military.
The agency is also currently investigating the impact of overdraft fees on consumers and seeing whether these can be anticipated and avoided. It is making a serious effort to help prevent financial exploitation among older adults and has created Money Smart, a new financial education resource to help older people and their families.
The CFPB has also proposed modifications on mortgage rules. On July 23, shortly after the Senate vote, the CFPB took action against a Utah-based mortgage company for giving employees incentives to steer customers to take expensive mortgages.
In addition, the CFPB has put companies on notice for unlawful collection of consumers’ debts and is seeking to improve the regulation of debt collectors.
When she proposed the idea for the CFPB in a 2007 article, Massachusetts Senator Elizabeth Warren made the point that the U.S. government made greater efforts to regulate toaster ovens than mortgage loans. The CFPB has plenty more to do to protect consumers from the questionable marketing tactics of companies peddling mortgages and promoting student loans. The New York Times has dubbed the successful confirmation of Cordray as a win for “the good guy.” Based on what the CFPB has accomplished so far for consumers, this is very much the case.
A big thank you to Care2 members who signed the petition to protect consumers not corporations!
Photo via Wikimedia Commons