In 2010 the Dodd-Frank Wall Street Reform Act was signed into law. The summer of 2011 saw the opening of the Consumer Financial Protection Bureau. Since then they have been able to help countless consumers with their financial problems. Those facing unfair lending and collections problems, from home loans to car loans to credit cards, can all turn to the CFPB for help. The CFPB has the power to enforce rules and regulations, often shutting down those businesses that are dealing unfairly. But a closer look shows that the CFPB may have a little too much power.
A recent hearing of the CFPB’s semi-annual report was opened with some pointed remarks from Republican Jeb Hensarling. The Texas representative points out some of the issues that his party has with the Bureau. The biggest concern is that the CFPB is not monitored, and is not accountable to any other agency. The only way to stop a process from the Bureau is a direct order from the president himself. Otherwise it must go through some tough voting in congress (not just a majority vote, but a super-majority vote). This leads to many questions about this agency.
The biggest concern is that consumers will find themselves with a lack of choices. Instead of being able to go and use whichever financial company they want, the choices could be dwindled down by the CFPB until there are only a select “government approved” few to choose from. The consumer may not have access to a particular service or product even if they “need it, understand it, and want it.”
The CFPB has done a lot of great things. They have gone after those companies doing shady business. They have helped out those who cannot help themselves (such as the elderly or active-duty service members). They have helped to shut down companies that are exploiting their customers. In order to perform their deeds of service, they need a lot of sanctioned power. Some would argue it is too much power that is not checked in any way. Is the safety they provide worth the risk that they could be too powerful?
As the consumer we have choices. We can shop around for the best deal; we can read the contracts and figure out whom we want to give our money to. The debate here is that those choices will eventually go away. If that is something important to you, I encourage you to read up on the CFPB. Start with their website, the Wikipedia page on them, and some other pages that will give you insights. From there you can make an informed decision to contact your representatives and show your support or your concerns.
The CFPB has done a lot of good in the financial world. The statements made by Rep. Harslinger are that they COULD abuse their power. Unfortunately, that is the same with any government body (albeit this one could do so more easily according to Harslinger’s concerns). As the consumer the CFPB still has your back. If you need help fighting a battle where you feel you are taken advantage of, get in touch with them.