With Donald Trump as the country’s new president and a Republican-majority Congress, major changes are anticipated in many federal agencies. One likely target is a relative newcomer on the scene, the Consumer Finance Protection Bureau (CFPB).
The CFPB was created early in President Obama’s administration in response to the 2008 crisis in the financial and lending industry. The primary goal of the Bureau is “to make consumer financial markets work for consumers, responsible providers, and the economy as a whole.” The agency does this by enforcing federal laws that govern the finance and banking industry.
For example, the CFPB brings lawsuits against companies that break federal laws relating to payday loans, student loans, credit cards, and mortgage practices. It also provides tools and information to help consumers learn about the laws that are in place to protect them.
Before the CFPB was created, several federal agencies were responsible for protecting American consumers. These functions are now consolidated in the Bureau—a single expert agency.
The agency’s director, Richard Cordray, has taken an aggressive approach to the agency’s enforcement responsibilities. Many Republican lawmakers would like to kill the agency. If this is not politically wise or possible, here are some other measures they may take to overhaul the CFPB and deprive it of a meaningful enforcement role:
- removing Cordray as director before his term ends in 2018;
- changing the governing structure to use a bipartisan commission rather than a director; and
- requiring congressional approval of the agency’s budget.
Consumers of financial products will feel the effects of any of these moves. Families will likely see higher fees for financial products, increased interest rates, and fewer disclosures when they use financial services.
If we learned anything from the 2008 financial crisis, it is that strong governmental oversight is needed in the consumer finance industry. The CFPB plays an important role in protecting all of us from illegal banking and finance practices.
The attorneys at the Alexander Law Group, LLP believe in empowering Americans. That’s why we represent individuals who have been badly injured in accidents. If you need legal help with a bad accident case, contact the attorneys at Alexander Law Group, LLP at 888.777.1776 for a free case consultation. People who irresponsibly harm others should be held accountable for their actions.