Consumers First Act: Consumer Groups Applaud House On Passage

Consumer groups today applauded passage of the Consumers First Act.

The previous leadership of the Consumer Financial Protection Bureau recovered over $12 billion in restitution and cancelled debts for over 30 million Americans. Under its new leadership, the CFPB has not lived up to that standard. It has failed to adequately enforce the rules, while advancing a set of proposals that roll back, rather than advance, consumer protections.

Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q1 hedge fund letters, conference, scoops etc

It has moved to gut consumer protections on payday loans, created big loopholes for financial technology companies, stopped supervising lenders for compliance with the Military Lending Act, and proposed to limit the collection of data that is crucial to fighting lending discrimination.

“An effective consumer financial protection agency saves families billions of dollars a year, and makes their economic lives more secure. It fights lending discrimination, and shuts down tricks and traps” said Lisa Donner, executive director of Americans for Financial Reform. “Unfortunately, the evidence keeps piling up that the current leadership at the agency is focused on rolling back protections and enabling bad financial actors to rip people off. It is so important that members of Congress continue pressing the CFPB to live up to its consumer protection mandate and fulfill its basic responsibilities, as the House has in passing the Consumers First Act today.”

“We have not forgotten the financial service abuses experienced by millions of Americans that lost their homes and were subjected to other forms of lending and economic hardship before the passage of the Dodd-Frank Wall Street reform bill and the creation of the Consumer Financial Protection Bureau” said Hilary Shelton, director of the NAACP Washington bureau and senior VP for policy and advocacy. “With the passage of the Consumers First Act, we can begin the process of restoring and strengthening the weakening damages done by the present administration, and strengthening the ability of the CFPB to once again provide the economic protections it was created to administer.”

“Passage of this legislation is a step towards ensuring we avoid repeating mistakes of the past,” said Gregg Orton, national director of the National Council of Asian Pacific Americans. “The impact of the financial crisis on the Asian American Pacific Islander (AAPI) community has always been obscurred by a lack of disaggregated data, and our communities are often most at risk of predatory lending practices due to language barriers. A weakened CFPB is a signal to bad actors that it's open season again on communities of color. That is why this bill is so important.”

“The Consumers First Act seeks to ensure that all consumers and communities are protected within our financial system, especially Latinos,” said Jennifer Brown, associate director of economic policy, UnidosUS. “The Act seeks to reinstate the Consumer Financial Protection Bureau’s robust fair lending enforcement to ensure that every consumer has fair and equal access to affordable financial products and services. This is critically important to Latinos who lost an entire generation of wealth during the Great Recession and are still prey to lenders who seek to lure borrowers into abusive consumer products.”

“The CFPB was created to protect consumers from discriminatory, predatory, and downright reckless financial practices – and when it opened its doors, it did just that,” said Vanita Gupta, president and CEO of The Leadership Conference on Civil and Human Rights. “But under the Trump administration, the CFPB has strayed from its mission to protect the people. The Consumers First Act will ensure the CFPB is doing the job that Congress – and civil rights and consumer advocates – intended it to do. We welcome the House vote and urge the Senate to act.”

“Consumers were an afterthought before the financial crisis, and the Consumers First Act will help restore the original intent in creating the Consumer Financial Protection Bureau: to have an agency focused on consumer protection and fair lending, not on preserving unfair but profitable tricks and traps,”  said Lauren Saunders, associate director of the National Consumer Law Center.

“The Consumers First Act returns the CFPB to simple rules that the Trump CFPB has purposely failed to follow,” said Ed Mierzwinski, U.S. PIRG Senior Director for Consumer Programs. “The CFPB's only job is to put consumers first while it enforces consumer laws and holds wrongdoers accountable for harming them.”

“The House just took an important step toward restoring the CFPB to its statutory purpose,” said Debbie Goldstein, executive vice president at the Center for Responsible Lending. “Since the end of 2017, the CFPB has gone through drastic changes that move the agency away from its founding mission of protecting consumers. Director Kathy Kraninger, and her predecessor Mick Mulvaney, have weakened fair lending enforcement and dismantled financial protections for servicemembers, students, seniors, and countless Americans across the country. We thank Chairwoman Waters for her commitment in making consumer protection a priority in this Congress and urge the Senate push this important bill forward.”

“The Consumers First Act is a reasonable measure that would sharpen the CFPB’s focus on protecting American consumers,” said Christopher Peterson, director of financial services and senior fellow at the Consumer Federation of America. “The Senate should immediately take up and pass this helpful legislation.”

“With CFPB enforcement actions down 80 percent last year compared to the year before Trump was elected, this administration has let big banks, predatory lenders, financial scammers and other big campaign donors run wild at the expense of everyday consumers," said Jeremy Funk, spokesman for Allied Progress. "It’s unfortunate that Congressional action is needed to convince the Trump CFPB to carry out its most basic duties to protect consumers, but here we are.”

“After a successful first six years defending consumers’ rights in the financial marketplace, the CFPB came under attack by political leaders within its own walls, frustrating its ability to protect hardworking families. The Consumers First Act will get the CFPB going in the right direction again, and will solidify its role to safeguard consumers from financial deceit, discrimination and fraud,” said Christine Hines, legislative director of the National Association of Consumer Advocates.

“Consumers are grateful to Chairwoman Waters for her work to return the CFPB to its primary mission of protecting consumers through the Consumers First Act,” said Linda Sherry, Consumer Action’s director of national priorities. “This bill would require the Consumer Bureau to maintain a public complaint database, restore the Fair Lending and Student Lending offices and return to holding companies accountable through oversight and enforcement — the way the agency was created to be.”

“We applaud the House’s efforts to do what is right for American consumers and pass the Consumers First Act. It will ensure that consumers are once again receiving federal protection from the fair lending and student loan offices and that the CFPB is fully staffed,” said Jesse Van Tol, CEO of the National Community Reinvestment Coalition. “The CFPB hasn't been standing up for consumers the way it was intended. Even as this bill came up for a vote, the agency was working on a plan to exempt more than half the nation’s banks and other lenders from having to report on their mortgage lending under the Home Mortgage Disclosure Act. That data, which lenders have been gathering and reporting for years, is critical to spotting discrimination in lending and as an early warning on risky lending behavior.”

“The Trump administration has turned the Consumer Financial Protection Bureau into an institution dedicated to protecting the maximization of corporate profits, regardless of the harm to consumers,” said Beverly Brown Ruggia, financial justice organizer at New Jersey Citizen Action. “It is time for Congress to demand the Bureau return to its original mission and mandate: to protect the public, particularly the most vulnerable among us, from unfair, deceptive and abusive practices by predatory banking and finance companies.”

The Consumers First Act pushes the CFPB back to carrying out its statutory purpose of protecting American families from bad actors with steps including:

  • reestablishes the full duties of enumerated offices, including the Office of Fair Lending and Equal Opportunity;
  • restores the supervisory and enforcement powers of the fair lending office;
  • reestablishes a dedicated student loan office;
  • reactivates prior MOUs promoting effective interagency efforts;
  • requires adequate agency staffing, including for supervision and enforcement, to fully carry out the Consumer Bureau’s statutory mandates;
  • requires the Consumer Advisory Board to include a majority of members who represent the consumer interest;
  • limits the number of political appointees that may be hired.



About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver