Save Our Financial Protections; Save the CFPB

Dave Johnson

Wall Street’s business model is fraud. The Consumer Financial Protection Bureau (CFPB) was created to fight fraud. So naturally, Wall Street and Republicans in Congress are trying to kill the CFPB as fast as they can.

The CFPB came into existence after the public learned about the Wall Street frauds that led to the near-collapse of the financial system in 2008. Financial firms were found to have been scamming, lying, defrauding, manipulating and generally tricking people into signing up for things that did little more than drain their funds. And making Wall Street types really, really rich.

In some cases, financial firms were draining people’s funds even though they hadn’t signed up for it. A recent example of the work of the CFPB was nailing Wells Fargo for fraudulently opening accounts for customers, then charging them fees for the accounts.

In the time the CFPB has been in existence, it has:
● Returned $11.8 billion to 29 million consumers from financial companies that broke the law;
● Enacted key rules, including a series of reforms to reduce foreclosures; and
● Handled more than 1 million consumer complaints, requiring companies to respond directly to their consumers and, where necessary, issue refunds.

CFPB Cracking Down On Payday Lenders

Payday loans are a debt-trap scam. The payday loan industry intentionally loans money to people who can’t pay the loan back, then traps them into a cycle that drains them of everything. The push borrowers into loan after loan, with the new loans paying back to old loans, always at extremely high interest rates. The idea is to collect more and more from the borrower, until they’re completely broke, then more on to another borrower.

Don’t take my word for it. This is a business model, and industry insiders actually say so:

“The theory in the business is [that] you’ve got to get that customer in, work to turn him into a repetitive customer, long-term customer, because that’s really where the profitability is.”

The CFPB is trying to crack down on the predatory payday lending industry that hits working people so hard and is so lucrative for Wall Street. The Bureau proposing rules that would:

● Require lenders to make sure the borrower has the ability to repay loans,
● Limit loan payments to amounts that would not be a financial hardship,
● Not allow lenders to allow consumers to immediately get another loan or carry more than one loan,
● Limit how often lenders can directly try to take payments from a borrower’s account if there are not sufficient funds to cover the payment.

Wall Street’s Financial CHOICE Act

Wall Street is trying to get rid of, or at least neuter, the CFPB. Wall Street makes a lot of money from scams, trickery, fraud, gimmicks and manipulation, and the CFPB is cramping Wall Street’s style.

And Wall Street gives a LOT of money to politicians. So Wall Street likes to get its way.

Now Wall Street and Republicans in Congress are pushing a bill they call The Financial CHOICE Act. The CHOICE Act would strip the CFPB from being able to regulate payday lenders. In fact, the CHOICE Act website, hosted on a taxpayer-funded, U.S. Congress webserver, reads like it is written by people working for, or hoping to soon work for, Wall Street.

The bill would require the agency to get approval from the Republican Congress before it can do anything that interferes with how financial institutions behave. It restricts the Bureau’s from writing rules regulating financial companies. It revokes the agency’s authority to regulate the use of arbitration clauses to keep people from being able to take financial institutions to court.

The Consumerist explains what the bill means for payday lender regulation:

Section 733 of the Act calls for the “removal of authority to regulate small-dollar credit.”

“NO AUTHORITY TO REGULATE SMALL-DOLLAR CREDIT — The Agency may not exercise any rulemaking, enforcement, or other authority with respect to payday loans, vehicle title loans, or other similar loans,” the Act states.

The bill would even repeal a rule that requires investment advisers to act in the best interest of their clients.

Nice.

Call, Call, Call

Wall Street’s CHOICE Act is a “sneak law.”

One way the corporate/plutocrat/conservative agenda gets foisted on us is through what I call “sneak laws.” These are laws that sneak through state legislatures and the Congress before We the People get a chance to learn about them and organize opposition.

This is a law that can’t pass if the public learns about it and organizes to stop it. Spread the word.

Call your Representative. Call your Senators. Tell them you know about this and you oppose it. March. Sign petitions. Give money to progressive organizations that work to get the word out and to organize people who have heard the word.

And then, again: Call your Representative. Call your Senators. Tell them you know about Wall Street’s Financial CHOICE Act and you oppose it.

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