The CFPB Is An “Unaccountable” Success of Dodd-Frank Reform

In this video, Sen. Elizabeth Warren (D-Mass.) reviews the state of the Dodd-Frank financial reform bill after five years and the record of the Consumer Financial Protection Bureau.

Republicans have done their best to prevent the Dodd-Frank financial reform law from being effective – from loading up the Securities and Exchange Commission with Wall Street tools to eviscerating the Commodity Future Trading Commission’s budget. Yet it is the Consumer Financial Protection Bureau that actually attracts more Republican ire than any other component of the law. And their main criticism? “The CFPB is unaccountable.”

Yes, it’s true that the CFPB is safely out of reach of Wall Street lobbyists and the members of Congress who serve them. As a result, it actually does its job.

This week, the CFPB scored another victory on our behalf when it forced Citibank to return $700 million to victims of credit card fraud. For years, Citibank’s credit card salespeople had gotten away with “deceptive marketing and unfair billing of credit card add-on products and services.” These included selling nonexistent products, not alerting customers about hidden fees, and ignoring customers requests that they stop. Now not only do they have to stop, but they have to pay a steep fine and give back all the ill-gotten money.

On Wednesday, the CFPB ordered Discover Bank to pay $18 million for abusive student debt collection practices. These included repeatedly calling people at night and lying about how much was owed. $16 million has to be paid back to victims and another $2.5 million was included as a fine.

These are the latest in a seemingly long string of victories for consumers. Since its inception, the CFPB has brought over $10 billion back to victims of fraud and discrimination, and adopted new rules to make sure such predatory practices can never happen again. Of course, the fraudsters and predators lose out in such an arrangement, and are willing to spend some of their wealth to remove this existential threat.

The architects of the CFPB, led by now-Massachusetts Sen. Elizabeth Warren, saw how Wall Street captured the regulatory agencies leading up to the crisis and did everything they could to prevent the same fate from befalling the CFPB. As a result, they limited its leadership to a single director and placed its budget within the Federal Reserve, safely out of reach of Congress. The most congressional Republicans can do on behalf of their donors is attempt to waste the Bureau’s time and money with inquiries and investigations.

But the CFPB’s aura of invincibility is not guaranteed. In the current budget battle, Republicans are adorning must-pass budgets with their wish list of deregulation and spending cuts, daring the Democrats to shut down the government. Among these is a bill to gut the Dodd-Frank Reforms and bring the CFPB’s budget under Congressional control. Such proposals should not be able to escape the Senate, let alone gain the President’s signature, but it’s happened before.

For now, the CFPB is immune to budget restrictions and cuts. This means the Bureau’s winning streak on behalf of U.S. consumers can continue far into the future, unimpeded by Congressional demands on behalf of Wall Street money.

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