This month marks the fifth anniversary of the law that created the only financial regulatory agency with a mandate to put the interests of consumers first.
Since it opened its doors in July 2011, the Consumer Financial Protection Bureau has begun to bring badly needed rules of fair play to mortgages, debit cards and other areas of the financial marketplace, while delivering some $5.5 billion in refunds and restitution to more than 14 million consumers cheated by financial companies big and small.
Now the bureau has taken the first steps toward issuing rules that could end abuses in payday, car-title, and other high-cost, debt-trap consumer loans -- loans that have had devastating effects on countless Alabama families. Unfortunately for the residents itizens of Alabama, however, Sen. Richard Shelby appears to be lining up with the payday lenders and the big banks in their ceaseless efforts to block regulation and undermine the Consumer Bureau’s effectiveness.
Shelby has voted for bills and amendments designed to curtail the CFPBs funding and authority and roll back financial reform. In addition, as chairman of the Senate Banking Committee said in January, “I’ll be doing everything I can to if not repeal — which I’d like — but modify Dodd-Frank.” According to Phil Angelides (head of the financial crisis inquiry commission), Sen. Shelby’s “Financial Regulatory Improvement Act” is “another episode in the constant effort by Wall Street to roll back some of the key protections that were put in place after the financial meltdown of 2008.”
Poll after poll show that most voters believe there should be more, not less, government oversight of financial companies. Nearly nine out of 10 voters say that small-dollar lenders should have to make sure a loan is affordable in light of a customer’s income and expenses. These results are highlighted by the bipartisan support for state legislation to cap the interest rates on payday and auto title loans.
We often critique governmental programs for being redundant and wasteful. In its short existence, the Consumer Financial Protection Bureau has proved its worth. It is a big win that we now have an agency with a mission to put consumer protection first. We urge our elected officials to start supporting instead of undermining its crucial work.