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Why the CFPA Must Be Independent

March 10, 2010

In order to create and enforce fair rules of the road for consumer financial products, the Consumer Financial Protection Agency (CFPA) must be independent.  This is the only way we can crack down on abuses, strengthen our financial system, and prevent another financial crisis.

Wall Street and the big banks want the CFPA to be as weak as possible so they can continue to flood the market with dangerous products and rake in the big bucks at our expense.

Here’s how the big banks want to weaken the CFPA:

1. Make the CFPA Part of Another Regulator

Currently, consumer protection is spread across seven different regulators.  Banks want the CFPA to be housed at one of them, such as the Office of the Comptroller of the Currency (OCC).

Why This Is a Bad Idea:

Existing regulators like the OCC have had years to show any interest in protecting consumers.  Instead, they’ve only shown an interest in protecting the big banks.
Here’s what’s wrong with the current regulators:

  • They’re paid by the lenders they regulate, and usually bow to the big banks’ wishes.
  • They’re mainly concerned with the short-term profitability of big banks.
  • They’ve never shown much interest in consumer protection.
  • They totally failed to foresee, let alone prevent, the nation’s economic crisis.

You can read more about their failures in AFR’s letter to the Senate.  Obviously, these regulators should not be given more authority over consumer protection.

2.  Give Someone Else Authority to Override the CFPA’s Decisions

This is a convoluted and sneaky way of weakening the CFPA.  The banks want to allow the Treasury department, some group of regulators mentioned above, or some new unnamed group to veto the CFPA’s decisions.

Why This Is a Bad Idea:

These groups usually act on behalf of the big banks (see above).  So it’s really just another way of subordinating consumer protection to big bank wishes.

No other agency charged with protecting the American public is subject to this kind of override.  For example, no auto industry-backed group is allowed to override auto safety rules or vehicle emissions standards. Obviously, we wouldn’t have any auto safety rules or emissions standards if they were given this authority.

We could go on:  the FAA’s airline safety rules are not subject to approval by the airlines.  The EPA’s clean water regulations cannot be vetoed because of an impact on any industry.  We do not let the Small Business Administration block worker safety rules because they might eat into business profitability. It doesn’t make sense to allow the financial industry to override consumer protections either.

  1. Ilene Richman permalink
    March 11, 2010 12:31 pm

    We need an independent CONSUMER FINANCIAL PROTECTION AGENCY. This agency should not be hidden in any other agency. It must stand on its own and have an inspector general to protect consumers from greedy banks, credit card issuers, investment banks, non-bank entities, mortgage companies or any other company in the financial industry that does business with the public. Consumer protection has been swept under the rug as the regulators who were supposed to protect consumers were being paid by the financial institutions. This is a scandal and should thoroughly be investigated by the federal authorities. Consumers have no protection against bank fees, usury interest on credit cards, fees charged by mortgage companies, etc. Consumers are a large voting bloc and we are going to vote out of office all that vote against an independent CONSUMER FINANCIAL PROTECTION AGENCY. Do not hide this agency in the Federal Reserve (corrupt with the Treasury Secretary Geithner and Summers). If our legislators thinks we are stupid, we are not. We will haunt the legislators who vote against an independent and overlooked CONSUMER FINANCIAL PROTECTION AGENCY. We all don’t get freebees as Senator Dodd or other legislators who get oodles of money from the banking industry.

  2. dorothy wank permalink
    March 11, 2010 7:31 pm

    CFPA must be independent!Regulation for banking and lending is a must

  3. Kim permalink
    March 11, 2010 11:51 pm

    This info about the OCC answers so much for me. I fought a three year battle against Citibank Credit Card (Sears Mastercard)as they charged me three times for one appliance, miscalculated finance charges, posted my payments incorrectly, bullied me and refused to be accountable. I had perfect credit until this incident. Now when creditors see this one thing on my credit report – they are cutting my limit, cancelling my cards, etc…I spent over 6 months trying to communicate with the OCC after filing a complaint and calling them every month. I was not allowed to talk to anyone. They did however “speak” to Citibank and NEVER even spoke with me to hear the facts or see all the documentation that I had. They literally mimicked in writing what Citibank told them. My credit is ruined and Citibank got by – with the blessing of the OCC with fraud. I now know why it happened.

  4. Michael Villacres permalink
    March 13, 2010 11:39 pm

    The CFPA must be indenpendent to have the freedom to say and look into whatever financial matter is a threat to the weakened tax payer. We don’t all know, for the most part, let alone understand what blue chips, derivatives are. If you ask the Americans who lost their homes and or savings, what was the cause of The Recession most will say bankers’ greed.
    Subprime mortgages taking advantage of poor neighborhood who did not understand what they were signing let alone getting themselves into. Did we? Greed not money is the root of our evil. Let us all remember so we do not repeat.


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