During last week’s Republican debate on FOX Business, an ad paid for by the American Action Network (AAN) depicted Consumer Financial Protection Bureau (CFPB) workers robotically denying personal loans to needy individuals.
AAN paid $500,000 to run the ad seven times during the debate, attacking the agency and its champions – Senator Elizabeth Warren and CFPB Director Richard Cordray.
The ad’s dismal, Soviet-inspired concept sets the scene for misleading accusations of injustice against consumers. Warren and Cordray are portrayed on red banners as dictators while the assembly line rubber-stamps personal loan denials – a far cry from the work the CFPB actually does, such as providing ways for ripped-off consumers to hold banks accountable and reining in “payday” lenders that prey on military families.
However, beyond its sham portrayal of the bureau’s work, the ad is a symptom of a bigger problem: A concerted push to stop or delay the successful work of the agency that has returned over $11 billion dollars to harmed consumers. The real worry about the ad should be with the huge sums of money being funneled into the larger effort to thwart the agency.
A timely example of these efforts to block the CFPB’s work are right-wing lawmakers’ concurrent attempts to insert riders—or unrelated policy proposals—into the federal spending bills in order to weaken consumer financial protections issued by the CFPB, as well as undermine the structure and set-up of the Bureau.
By attacking the agency created to look out for consumer interests in the financial market, these corporate players are in-effect attacking consumers themselves.
So why is the CFPB under attack?
Follow the money. Two American Action Network board members lobby on behalf of Navient, a student loan provider currently under investigation by the CFPB (and several other regulatory authorities) for allegedly overcharging and mistreating borrowers. And another board member lobbies on behalf of both student loan and payday lending clients, practices also under examination by the CFPB. This lobbying seems to be paying off.
Policy riders that would cripple the CFPB’s ability to do its job are leaching through the appropriations process, piggybacking on budget bills. Here’s what the anti-CFPB and anti-financial reform riders would do:
- Change the structure of the Consumer Financial Protection Bureau so that it functions under the oversight of an odd-numbered bipartisan commission rather than a director. That’s a structure designed for backlog and playing to party interests, and a recipe for getting nothing done.
- Remove the CFPB’s independent funding, making the bureau subject to congressional appropriations – the exact process currently trying to dismantle its regulatory power brick-by-brick. By removing the bureau’s independent funding, it could be defunded to the point of falling under disrepair, as we’ve seen of other agencies on the chopping block of a partisan agenda. The CFPB budget currently comes from the Federal Reserve; it submits semi-annual budget justifications and is annually audited by the Government Accountability Office.
- Stall the CFPB’s ongoing efforts to limit the use of forced arbitration in financial contracts.
- Cut the power of the CFPB to enforce fair auto lending principles.
- Block regulation of predatory payday lenders. By not regulating this market, poor and underbanked communities are forced into paying outrageous service and interest fees for small dollar loans in order to make ends meet, while payday lenders profit exorbitantly from their difficulties.
An agency entrusted with standing up for the public interest was bound to make enemies of the corporate bad actors only looking out for their self-interests. Too many of these decisions on riders are made in back-room deals by the same special interests funding the AAN attack ad. But informed Americans should see through these thinly veiled attempts by corporations to sway public opinion in their favor. What will be harder to do is keeping these powerful special interests from hijacking the budget process.
Luckily, there’s still time to join the fight to protect the CFPB’s power to put in place rules to protect the public interest.
Public Citizen has been working with a coalition of nearly 200 partners to ensure that no riders make it through the appropriations process. But to make sure they stay strong, lawmakers need to hear from their constituents. Please sign the petition to demand that your representatives in Congress support a budget deal with no riders.
Keira Thompson is the online advocacy organizer for Public Citizen’s Congress Watch division.