The establishment of the Consumer Financial Protection Bureau came in 2012, following the fallout of the economic crisis set off by the collapse of the housing market and a massive wave of foreclosures.
As our Miami debt defense lawyers know well, the birth of the agency was an unprecedented effort to address and prevent the kinds of abuses by banks and other large financial institutions that led to the financial crisis. It also helps to keep fraud and debt collection abuses at bay.
But now, there are those who seek to severely undercut it with the introduction of the Financial CHOICE Act, which purportedly aims to curb excess regulation and enforcement (a non-existent issue in our opinion). The truth of the matter is those behind this measure are eager to scrap consumer protections because they are viewed as bad for business – even if the business itself is bad.
Among the effects F-CHOICE would have:
- Doing away with the authority of the Financial Stability Oversight Council to target large, global non-bank financial institutions for higher regulatory oversight. The idea for this power was to put in place a system that would help proactively prevent (as opposed to simply react/ manage) a financial meltdown of the kind we saw in 2008.
- Scrapping the Orderly Liquidation Authority and the stress test and living will provisions that allow financial regulators to avoid bailouts of these non-financial institutions by resolving them in a more expedited fashion.
- Eliminating the CFPB’s authority to bar and prevent financial fraud – including those in the mortgage and banking industry – that have targeted middle class Americans for the last several years. One need look no farther than the debacles of Wells Fargo (thousands of sham accounts created in customers’ names) and Countrywide (with sales of questionable mortgages playing an integral role in the housing crisis) to see why this is necessary.
F-CHOICE recently passed in the U.S. House, and would effectively cripple the CFPB’s ability to take on deceptive and unfair business practices. Supporters say they are doing so because the authority is not well-defined and is too opaque. Nevermind the fact that the law the CFPB utilizes to achieve these goals has been in place more than eight decades, and further, has been used just in the last handful of years to return some $12 billion to consumers who were treated unfairly by banks and other large financial institutions.
For an idea of how the CFPB helps everyday people, consider its enforcement actions against credit card companies that impose unfair charges. Banks sell customer information – including credit card information – to telemarketing and direct-mail firms. These companies have been known to use this access to charge your card, even without obtaining an actual account number. This results in many hundreds of million dollars in unwanted charges, which have been shown to disproportionately affect the elderly. The CFPB has taken on this issue by intervening in halting this practice, and compelling banks to be accountable to repay consumers for their losses – including $727 million from Bank of America and $700 million from Citibank.
F-CHOICE would also put an end to the practice of allowing consumers to publicly post their experiences with unscrupulous payday lenders and other financial predators on the CFPB’s government website.
Our debt defense attorneys in Miami would encourage our leaders to think more carefully before stripping away these important protections.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs|Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.
Why we must not gut consumer protections, June 9, 2017, By Prentiss Cox, Jose Quinonez and William Bynum
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Florida Debt Settlement Companies Shuttered by FTC and AG, May 29, 2017, Miami Debt Defense Attorney Blog