This reveals how the bureau is particularly important to protect vulnerable consumers, like the elderly, who are frequently targeted by fraudsters and predatory lenders because of their cognitive and other impairments and because they often have accumulated substantial assets. The CFPB is the only federal agency with an office specifically dedicated to protecting the financial well-being of older adults.
The bureau has brought cases against companies that attempted to take advantage of seniors by, for example, misrepresenting the interest rates on pension advance loans or deceptive advertising. In 2015 alone, consumer complaints to the CFPB brought relief to more than 600 older Americans just through debt collection problems.
The bureau has also worked to prevent financial abuse of the elderly, estimated to cost seniors as much as $36 billion annually. The CFPB has educated financial institutions, nursing facilities and others about recognizing and stopping elder financial abuse and exploitation.
Consumer protection in peril
Given Alice's ill health, the consequences for her might have been disastrous if she had been thrown out of her home. But now she – and all of us – face the loss of the CFPB's aid.
The CFPB is under attack from Republican members of Congress who believe more in lifting bank regulations than in protecting consumers. Some members have proposed eliminating the agency altogether.
The House of Representatives has passed a bill that would cripple the CFPB by, for example, taking away the power it used to fine Wells Fargo for opening illegal accounts and concealing its complaint database from public view. In other words, it would force the bureau to sit idly by as financial institutions lie to consumers.
Even if the bureau survives, it may be less protective of consumers when current director Richard Cordray leaves, which he said he plans to do by the end of the month. Then we might see a former banker or bank lawyer put in charge, just as has happened at the Treasury Department and comptroller's office. Those officials opposed the CFPB's arbitration rule and seem far less interested in protecting consumers than Cordray. It is even possible that Treasury Secretary Steve Mnuchin himself might become the interim leader of the CFPB.
Nearly every American has or will have a loan or bank account, a prepaid card, credit card, a credit report or some combination of those, and so has dealings with a financial institution policed by the CFPB. But few of us read the fine print governing these things or can understand it when we do. That gives the companies that write these agreements the ability to draft them to suit their own interests at the expense of consumers.
Similarly, we do not always know when a financial institution takes advantage of us, just as Wells Fargo customers did not always know that it had opened unauthorized accounts that lowered their credit scores.
Consumers need protection from misbehaving companies. If the bureau is eliminated, significantly weakened or starts protecting banks rather than consumers, all consumers will suffer.
This is an updated version of an article originally published on July 10, 2017.
Commentary by St. John's University professors Jeff Sovern, who teaches law; Ann L. Goldweber, who teaches clinical education; and Gina M. Calabrese, who teaches clinical education. Follow Sovern on Twitter at @jsovern and Calabrese at @GinaCalabrese3.
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Disclosure statement: Along with three co-authors, Jeff Sovern received a $29,510 grant from the American Association for Justice Robert L. Habush Endowment and by a grant from the St. John's University School of Law Hugh L. Carey Center for Dispute Resolution in 2014 to study arbitration. It resulted in an article. Along with Professor Kate Walton, he received a grant from the National Conference of Bankruptcy Judges Endowment for Education to study debt collection, resulting in another article. He is a member of the National Association of Consumer Advocates.
Ann L. Goldweber is affiliated with NACA as a member.
Gina M. Calabrese is affiliated with the National Association of Consumer Advocates, New Yorkers for Responsible Lending, and the Association of the Bar of the City of New York (Chair, Committee on the Civil Court).