From 50 Ways-Rockbridge member Nathan Bowden:


Please take 5 minutes to call Representative Goodlatte today and ask him to vote against the Financial CHOICE Act (H.R. 10), which will interfere with the Consumer Financial Protection Bureau (CFPB) in its efforts to protect American families from abusive practices in the banking and lending industries.  If you cannot call today, please call tomorrow.  And please watch out for future alerts related to the Senate’s consideration of the same bill.



What is the CFPB and why do we need to protect it?


The CFPB was created in 2011, as part of the Dodd Frank Act, to make sure that businesses offering financial services to consumers (such as banks, mortgage companies, auto lenders, and payday lenders) comply with all laws and regulations designed to keep those businesses from harming consumers. The CFPB has the ability to compensate victims from its Civil Penalty Fund, which comes from penalties that the CFPBs assesses in enforcement actions against entities and individuals who have violated the law.  It also educates and empowers economically vulnerable consumers to make informed financial decisions by providing them with tools and information and by promoting a more inclusive and fair financial marketplace.


The CFPB is the first federal agency whose primary mission is to protect consumers rather than relying on enforcement by other federal agencies that have more complicated missions.  To a greater degree than existing bank regulators, CFPB has found and corrected misconduct by industry players in areas such as payday loans, student loans, mortgage loans, auto loans, checking accounts, credit reporting services, debt-relief services, and debt-collection services.


The CFPB’s recent actions related to the Wells Fargo “fake account” scandal, which had been ongoing for many years without being caught, is a perfect example of why creation of the CFPB was necessary and long overdue. (You can read more about the scam, and the CFPB’s response to it, here. For more about why Wells Fargo and its usual regulator failed to take action, see this article in American Banker and this article in the New York Times.)


For more examples of the CFPB’s good work protecting consumers, see this summary of enforcement actions taken by the CFPB in its first five years.



 What would the Financial CHOICE Act do to the CFPB?


Some of the changes that the Financial CHOICE Act would make to the CFPB:

  • Prohibiting the CFPB from regulating the abusive practices of payday lenders, title lenders, and similar high-interest lenders;
  • Ending the CFPB’s independence, and allow elected officials to intervene on behalf of their corporate sponsors, by:
    • Allowing presidents to fire the CFPB director at will
    • Giving Congress control over the CFPB’s annual budget, thereby allowing Congress to cripple it during the appropriations process
    • Requiring the CFPB to get Congressional approval before taking enforcement actions against financial institutions;
  • Ending the CFPB’s authority to investigate and examine large banks and returning that authority to bank regulators that have been less effective;
  • Ending the CFPB’s ability to respond to new industry scams and misconduct that have been carefully designed to fall outside of the existing laws and regulations;
  • Ending the CFPB’s ability to educate the public about financial products and services, and about their rights under the law;