U.S. Sen. Marco Rubio and Rep. David Jolly have sided with Wall Street bankers rather than protecting financial consumers, according to Florida PIRG, a public interest advocacy group.
“Rep. Jolly and Sen. Rubio have sided with big Wall Street banks and other financial institutions at the expense of consumers,” said Turner Lott, a campaign organizer with FLPIRG. “They have supported legislation that would starve the [Consumer Financial Protection Bureau] by changing its funding source.”
FLPIRG, a nonprofit, public interest advocacy organization, is campaigning to highlight the work and successes of the CFPB. Lott said Jolly is being targeted because he may still be able to vote on legislation that affects the CFPB before he leaves office in January. Jolly, a Republican, lost his re-election bid to Democrat Charlie Crist.
Rather than siding with Wall Street, Lott said, Rubio and Jolly should instead defend the CFPB against proposals that would weaken it.
The CFPB is a federal agency tasked with the job of protecting financial consumers from unfair, deceptive, or abusive practices and taking action against companies that break the law. The CFPB also provides education and information so consumers can make good financial decisions.
The CFPB’s successes for consumers cited by FLPIRG:
— The CFPB has returned nearly $12 billion to more than 27 million consumers by holding companies accountable for breaking the law.
— Among its numerous actions is a record $100 million penalty and consumer restitution against Wells Fargo for millions of fake, fraudulent consumer accounts created by its employees.
— The CFPB’s website hosts a complaint database that has processed more than one million complaints. It provides educational resources to help consumers make important financial decisions.
— More than 64,000 complaints from Floridians have been published in the database.
St. Petersburg Council member Darden Rice agreed that the CFPB needs to continue as an independent watchdog agency. The CFPB’s work to regulate financial companies and ensure consumers are financially stable is critical to an area like St. Petersburg, she said.
The prevalence of payday loan companies in the city is a prime example of the need for a watchdog. Rice said, “There are more payday loan storefronts than there are Starbucks and Burger Kings in the St Pete, Tampa, Clearwater metro area.
“These payday loan vendors are concentrated in areas that are predominately lower income communities and are still recovering from the economic collapse. We need to take necessary steps, like strengthen the CFPB, to protect consumers from predatory loan businesses that put people in debt traps they can never escape.”
Lott cited three threats to the autonomy of the CFPB:
— Proposed changes to its leadership structure – The agency is currently headed by a single director, Richard Cordray. There are efforts to change the structure to a commission of five people. Getting Cordray confirmed was a long uphill battle, Lott said. Getting five people confirmed would be even more difficult, possibly leaving the agency unable to fully function. Or the five seats could be stacked in favor of the industry it is meant to rein in. Both scenarios have been seen at other agencies, Lott said.
— Changes to its source of funding – The CFPB is currently funded independently through the Federal Reserve. Every banking regulator has had independent funding since 1864 to protect the economy from the politicization of banking policies as much as possible. Lott said there is an effort to bring the CFPB’s funding under Congressional appropriations approval – this means Congress could starve it to death so it wouldn’t be able to do its job because the lobbyists dominate those funding decisions.
— Stall the CFPB’s current rulemaking – The CFPB is currently working on rules that would protect consumers from payday debt traps and forced arbitration. Forced arbitration is used to prevent consumers from banding together and joining class action lawsuits to seek justice when they are wronged by financial companies. There are efforts to hamstring the CFPB’s work on these rules, he said.