Blog Posts By:

Ed Mierzwinski,
Senior Director, Federal Consumer Program

Throughout the anger and frustration over the Equifax breach debacle, consumers, reporters and legislators have repeatedly asked me: "Ed, why don't consumers, not credit bureaus, control when their credit reports can be shared or sold?" Now comes U.S. Senator Jack Reed (RI) with a PIRG-backed bill to do just that! 

When a tired TV show desperate for viewers goes over the top with wacky plots, it is said to have "jumped the shark." Unfortunately, even after the Wells Fargo debacle and even as bank profits return to record levels, the "viewers" of bank deregulation demands -- members of Congress -- still have an unslaked appetite for over-the-top, outrageous proposals to take consumer and financial system safety cops off the bank beat. Meanwhile, the public -- by wide, non-partisan margins, wants to keep the cops on the beat.

This month, Scott Tucker, a payday lender who used his proceeds to fund a LeMans racing team, was sentenced to 16 years in jail on federal racketeering and other charges.   Last fall, his former business partner Charles Hallinan, known as the Philadelphia Main Line "godfather" of payday lending, was also convicted of federal racketeering charges. Tucker and Hallinan's main business model? Their claim that their payday loan enterprises were for the benefit of Native American tribal partners and therefore subject to tribal immunity. The authoritative public interest law firm Public Justice speculates: "Tribal Immunity" may no longer be a Get-Out-of-Jail Free Card for payday lenders." It's about time.

With the departure yesterday of director Richard Cordray from the Consumer Financial Protection Bureau, we don't doubt that the President has the authority to nominate a new director of the Bureau. But the President's assertion later that day that he can and would appoint his own temporary or acting director -- at odds with the plain language of two laws --  places the bureau's leadership in crisis.

Yesterday, the Senate Banking Committee announced a bi-partisan bill designed to weaken bank regulations in numerous ways. Today the House Financial Services Committee votes on nearly two dozen bills. The worst would allow payday lenders and other seeking to avoid strong state laws under a new rent-a-bank scheme. It's Halloween again on Capitol Hill, with tricks for consumers and taxpayers, and treats for banks and payday lenders.

Like clockwork, after any big data breach is disclosed, powerful special interests seek to turn the problem into a bigger problem for consumers by  using it as an opportunity to enact some narrow federal legislation that broadly eliminates state data breach notice, state data security and other privacy protections.  I testified yesterday in the House warning of their Trojan Horse efforts, which not only take away existing laws, but deny any new laws, even on new problems identified. 

What would you do if you knew that the Big 3 credit bureaus were in the Top 5 of complaint leaders to the Consumer Financial Protection Bureau and that their mistake-ridden reports caused consumers to either be denied jobs or pay more for or be denied credit due to those mistakes? Well, if you were the leadership of the House Financial Services Committee, you'd consider not one, but two bills to make this worse by eliminating strong consumer protections and eliminating some and limiting other damages payable to consumers when credit bureaus wreck their lives. You'd hide a massive weakening of consumer protections inside a Trojan Horse bill that claims to be about letting the credit bureaus help people.

Recently released minutes of the July meeting of the Federal Open Market Committee, comprised of Fed governors and regional Fed Bank presidents, show its concern that Wall Street reform rollbacks proposed by Congress, Treasury Department and the White House could allow "a reemergence of the types of risky practices that contributed to the crisis." Meanwhile, Fed vice-chair Stanley Fisher repeated his warnings that risks from the proposed rollbacks were "mind-boggling."

As the big Wall Street banks, payday lenders and other opponents of consumer protection intensify pressure on Congress to weaken financial reform and gut the CFPB like a fish, numerous reports of further Wells Fargo malfeasance serve as a warning that the Consumer Financial Protection Bureau and the rest of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act are needed more than ever.

This week, the Consumer Financial Protection Bureau (CFPB) rolled out draft "Know Before You Owe" disclosures for banks marketing so-called "Standard Overdraft Protection," a controversial product that requires consumers to "opt-in" for the "privilege" of overdrafting debit and ATM transactions for a so-called convenience fee averaging $34. It also  released a study that finds that at-risk consumers who opt-in pay $450/year more in fees than other at-risk consumers.