By Robert Schlesinger |
The CFPB is the law of the land. The agency was created last year when the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed by Congress and signed by the president. This is how laws are made. It says so in the Constitution. A minority of senators can't decide on their own to nullify the law. And tellingly, few are raising the objection that Richard Cordray is unqualified for the post. In fact, he has received glowing and bipartisan support, especially from those he worked when he served as attorney general for Ohio.
Moreover, the CFPB has important work to do. The proliferation of abusive and unregulated financial practices played a notorious role in creating the financial crisis and bringing on the Great Recession. The new agency has been told by Congress to be the cop on the financial services beat and look out for the interests of consumers. This means making sure all types of consumers have access to financial products and services that are fair, transparent, and competitive. Specifically, the agency has been tasked with ensuring that consumers are protected from abusive and deceptive financial practices and are able to get information that is understandable and timely. There should no longer be a safe haven for firms hiding large fees deep within disclosure forms written in unintelligible legalese.
This is no small task because in today's world financial products are not just provided by banks. There are a host of purveyors out there, including check cashers, payday lenders, and rent-to-own outlets, that effectively have no public oversight. Consumers need to be better protected when they shop for financial services and not steered into expensive products that they don't need or understand. The CFPB needs a director to assume its full set of statutory authorities and make sure that fair rules are applied to banks and non-banks alike.
With an appointed director, the CFPB can remake the financial services landscape by elevating the interests of consumers and restoring accountability to the marketplace. By ensuring consumers are better matched with appropriate savings and credit products in a fair and transparent manner, the CFPA can help rebuild the foundation for the financial system by restoring the previously essential characteristics of integrity and trust.
About Reid Cramer Director of the Asset Building Program at the New America Foundation
Phil Kerpen Vice President for Policy at Americans for Prosperity
John Berlau Director of the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute
David Arkush Director of the Congress Watch Division of Public Citizen