In an op-ed published today, Congresswoman Maxine Waters (D-CA), Ranking Member of the House Committee on Financial Services, discussed the numerous ways in which the Consumer Financial Protection Bureau (Consumer Bureau) continues to fight for hardworking Americans who have been harmed by illegal, predatory financial schemes, and the ways in which President Trump and Congressional Republicans are trying to undermine its work. In the piece, Ranking Member Waters underscores the numerous impacts of the 2008 financial crisis and the importance of keeping a strong, independent agency to protect consumers from predatory actors.
Read the article online here.
The full text of the piece follows:
Why We Need the Consumer Financial Protection Bureau and Why Republicans Want It Dead
By Congresswoman Maxine Waters (D-CA)
Ranking Member of the House Committee on Financial Services
Donald Trump and Republicans in Congress are undertaking a full court press to dismantle Wall Street reform and destroy the Consumer Financial Protection Bureau. In fact, this week House Republicans will be sending a bill, which I call the Wrong Choice Act, to the House floor to do just that. This would be extremely harmful for hardworking Americans across the country. Not only do Trump and House Republicans want to take away health care from millions of Americans, they also want to once again give Wall Street license to fleece all of us.
Let’s first talk about why we passed Wall Street reform and created the Consumer Bureau in the first place. Remember the financial crisis? At the core of it, there was an epidemic of irresponsible and malfeasant behavior by financial institutions. Under-regulated predatory lenders peddled and pushed toxic subprime loans to unsuspecting borrowers. Then Wall Street packaged those loans into securities, paid credit rating agencies to rate them AAA, and made bets that they would fail. When they imploded, it sent the economy tumbling into the Great Recession.
The reverberations from that crisis are still felt today. We all remember the foreclosures, the neighborhoods and communities financially devastated, the jobs lost, and the retirements deferred. Americans lost $13 trillion in household wealth, 11 million Americans lost their homes, and the unemployment rate climbed to 10 percent. The economic impact was vast and harmful to all.
In the wake of the crisis, Democrats in Congress took necessary action to ensure that this sort of abusive behavior could never happen again. We passed the Dodd-Frank Wall Street Reform and Consumer Protection Act and created the Consumer Financial Protection Bureau, a regulator tasked specifically with protecting American consumers from the types of practices that led to the crisis. Today, Dodd-Frank and the Consumer Financial Protection Bureau play a critical role in the keeping the marketplace fair and safe, preventing risky practices from Wall Street banks, and ensuring that all Americans don’t have to go through the turmoil and suffering of another financial crisis.
What does the Consumer Bureau do? It takes action to rein in unfair, deceptive or abusive practices and bad actors, and puts money back in the pockets of consumers who have been harmed by financial institutions. The Consumer Bureau also ensures that when mortgage lenders issue loans, they’ve verified that borrowers have the ability to repay. That’s common sense, but it wasn’t always the case, and that’s a big part of the reason why the foreclosure crisis happened. The Consumer Bureau has also issued mortgage servicing rules to protect homeowners, and worked on overdraft, payday lending and debt collection issues.
In the course of its important work, the highly successful Consumer Bureau has returned nearly $12 billion to more than 29 million consumers who have been harmed by financial institutions. Let’s be clear: the agency lives up to its name.
But Donald Trump and Republicans want to go back to the bad old days and lead all of us down the road to another financial crisis, because for them, the priorities of Wall Street come first. Banks try to claim that Dodd-Frank regulations are hurting their bottom line, but the truth is that banks have never been more profitable. Banks raked in more than $171 billion in profits last year — a new record, according to the Federal Deposit Insurance Corporation. Some financial institutions simply don’t like the fact that they have the Consumer Bureau setting them straight when they misbehave, or that they have to comply with sensible Wall Street Reform rules that prevent harm. But that’s not a good reason to roll back these important protections.
Nevertheless, Republicans are falling over themselves, desperately trying to hurl all sorts of attacks at the Consumer Bureau. These attacks range from disingenuous to shamefully preposterous. They are even trying to cast blame on the Consumer Bureau for not stopping the Wells Fargo fake account scandal soon enough, even though the bank admitted the problem started nearly a decade before the Consumer Bureau was created.
These baseless attacks can’t obscure the outstanding work the Consumer Bureau is doing for working families. What’s going on in reality is that the agency is putting money back in the pockets of hardworking Americans, and keeping the financial marketplace fair and safe. The Consumer Bureau is an invaluable ally to consumers, and its work must continue.
That’s why I’m determined to fight the efforts of Donald Trump and Republicans to roll back Wall Street reform and eliminate the Consumer Bureau. Standing up to them is the right thing to do for Main Street, and the right thing to do for America.