44 Senators Want To Weaken The CFPB!

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Tuesday, May 10th, 2011

By Neha Singh

In 2010, we fought hard for real financial reform and won. The Wall Street reform bill passed by Congress and signed into law by President Obama created the Consumer Financial Protection Bureau (CFPB) to rein in unfair practices and products.

But the CFPB is under serious attack even before it has had a chance to open. Following their colleagues in the House, who earlier this week offered legislation that would weaken the powers of the planned Consumer Financial Protection Bureau, 44 Republican Senators sent a letter to President Obama vowing to block the confirmation of any nominee to head the new agency, unless there are “structural changes.”

Among the “structural changes” Republican Senators are demanding is the replacement of the bureau’s director position with a five-member commission. Such a move would seriously hamstring the CFPB’s ability to respond to fast-moving problems in the financial marketplace by weighing it down with an unnecessary and complicated bureaucracy. Opponents of financial reform want to slide a knife in the CFPB’s ribs by cutting its funding and stripping it of any meaningful powers. Efforts to subject the CFPB to the annual appropriations process would politicize its funding. In essence, opponents of the CFPB in Congress want to make certain that the CFPB is never capable of protecting consumers against credit card rip-offs and shady mortgages.

Pamela Banks, senior policy counsel for Consumers Union, had it right when she said that “We need a watchdog for consumers, not a lapdog for the banks, and that’s why Congress needs to stand up and reject this effort to cripple the CFPB.”

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