Don't Weaken Federal Regulators Of Wall Street
AS OUR ECONOMY recovers from the worst financial crisis since the Great Depression, the story of what led to this economic meltdown is well known. Homebuyers were persuaded to sign up for risky loans. Greedy brokers pushed clients into high-priced mortgages to reap higher profits. And when the housing market turned, and the banks that owned these loans were teetering on the brink of collapse, the American people were forced to bail them out.
Simply stated, there was little to no oversight of our financial markets and the predatory lending the Wall Street banks were engaged in.
Congress resolved to never to let a bailout like this happen again and to protect consumers from these unscrupulous practices. That’s why we created the Consumer Financial Protection Bureau. Established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the CFPB is the only regulator whose key mission is protecting consumers against financial fraud and abuse.
It’s only been up and running for a few years, but already the CFPB is showing that it’s up to this important task. The bureau has already won $425 million in refunds for more than six million Americans who were the victim of deceptive practices by credit card companies. That’s more than its entire annual budget. The bureau has also issued tough new rules for mortgage issuers that will end the types of predatory lending practices that got us into this mess, and has become a clearinghouse for Americans to file complaints about abusive financial practices.
The CFPB is fulfilling its mission of protecting consumers from the abuses of Wall Street that destroyed so many lives during the financial crisis. So why is it that as we continue to rebuild our fragile economy, some Republicans in Congress are hell-bent on dismantling this critical agency?
Republicans in the Senate have spent the last year filibustering Obama’s nominee to head the CFBP, Richard Cordray, an experienced former state attorney general with a long history of protecting individuals against financial abuse. They have pledged to block any nominee unless they are allowed to change its structure and funding mechanism, which ultimately could undermine the bureau’s effectiveness.
My colleague Rep. Scott Garrett uses his subcommittee chairmanship on the Financial Services Committee to tear apart the CFPB. Republicans have passed legislation to make the CFBP less effective and voted to cut its budget by more than half — all with the 2008 crisis still fresh on every American’s mind.
Most recently, House Republicans supported the repeal of the entire Dodd-Frank law in the latest version of the Ryan budget. It didn’t have to be this way. As a member of the budget committee, I introduced an amendment to the budget that simply expressed support for the CFPB, and opposed any attempts to obstruct its important work on behalf of American consumers. It was rejected on a party-line vote, with Garrett leading the opposition and several of his Republican colleagues on the committee openly calling for the elimination of funding for the bureau.
It seems to me that Garrett and his colleagues in the House majority are more interested in protecting the very banks that defrauded so many hard-working Americans than in protecting Americans from financial fraud and abuse, and preventing another financial crisis.
I encourage Garrett and his colleagues to visit our district office in Paterson and see my staff working to assist families who fell victim to the very banks they are trying to protect. These are hardworking individuals who were simply trying to provide what’s best for their families, but instead are facing foreclosure. The CFBP is there to ensure future generations don’t suffer the same fate.
Reining in the banks
We know what led to our nation’s economic crisis, and it only makes sense that we do everything in our power to prevent history from repeating itself. Without the proper oversight and projection that the CFPB provides, the big banks will do everything they can, including committing fraud and abuse, in order to pad their bottom lines and pay out bigger bonuses.
We cannot allow Wall Street to turn back into the Wild West and turn hard-working families across America into victims. We need to support the CFPB and encourage its success.