The first big enforcement action by the Consumer Financial Protection Bureau, conceived of and originally led by Elizabeth Warren, is netting $210 million from Capital One Financial Corp. for deceptive marketing of credit card “add-on” products. The settlement will “provide between $140 million and $150 million in restitution to 2 million customers.” The remaining $60 million is penalties, $25 million to the CFPB and $35 million and pay an additional $60 million in penalties—$25 million to the CFPB and $35 million to Office of the Comptroller of the Currency, the primary regulator of banks.
This puts all the credit card companies on notice. Gouging customers with deceptive practices will no longer be tolerated. We’ve got Elizabeth Warren to thank for that. It was her doggedness that kept the idea of the CFPB alive during heated and difficult Dodd-Frank negotiations. And it was Elizabeth Warren who got the Bureau off the ground while Republicans were obstructing the appointment of a permanent director.
The Consumer Financial Protection Bureau said Monday that it will start supervising the 30 largest firms that make up 94 percent of the industry. That includes the three big credit reporting firms: Equifax Inc., Experian and TransUnion.
This marks the first time that a single government agency will take an active role in policing credit bureaus, according to industry experts. The Fair Credit Reporting Act currently requires them to keep accurate information about consumers.
Elizabeth Warren, the Harvard law professor who has organized the new Consumer Financial Protection Bureau, will step down from her administration advisor position Monday and be replaced as de facto acting director by a top aide, the Treasury Department announced.
The Consumer Financial Protection Bureau formally opened for business Thursday, but 44 Senate Republicans have promised to block Cordray’s confirmation unless the White House agrees to major changes to the bureau that would weaken its power. The House approved those changes last week, including replacing the single director with a five-member bipartisan commission, but the White House strongly opposes the legislation.
Today the Consumer Financial Protection Bureau is open for business and despite its main creator, Elizabeth Warren, prevented from heading it, the Bureau still enjoys a 74% support from Americans. President Obama appointed Ohio Attorney General, Richard Cordray amid threats that Senate Republicans would not approve anyone to head the Bureau, lest their demands be met. However, a new poll from Center For Responsible Lending (pdf) shows that across partisan lines, Americans support financial reform in some form and want the consumer protection that the CFPB specifically offers. Also today, the House is scheduled to vote on a GOP backed measure that would lessen the influence of the Bureau by replacing a director with a board of directors.
Some key findings from the Center For Responsible Lending poll:
Likely voters, including majorities of Independents, Democrats, and Republicans, favor the 2010 Dodd-Frank Wall Street Reform law by a 5 to 1 margin (71% vs. 14%).
Presented with information about challenges in Congress to the law, almost two-thirds (63%) believe that policymakers should allow the law to be fully implemented.
Three-quarters (74%) of voters support the existence of a single entity with the mission of protecting consumers from deceptive practices.
Voters also voice overwhelming support for the following consumer protection functions of the Consumer Finance Protection Bureau: Requiring clearer explanations of rates and fees, restricting lenders from offering loans with risky or confusing features, and banning incentives to mortgage brokers to put homeowners into higher rate mortgages than they qualify for.
Three-quarters (73%) of voters want to see federal oversight of financial companies that previously lacked national oversight, including mortgage brokers, payday lenders, and companies offering pre-paid debit cards.
Read the report here.
President Obama has surrendered the fight to place Elizabeth Warren at the head of the newly created Consumer Financial Protection Bureau. Instead, he’s nominated former Ohio Attorney General Richard Cordray, a Democrat that made a name for himself suing big banks. Attorney General Cordray was…
I count myself as one of Elizabeth Warren’s die-hard fans. When I saw that she had been passed over as head of the Consumer Financial Protection Bureau, My first impulse was to blog about how unhappy this made me. I checked that impulse and decided to wait to see whose name was actually tapped. Afterall, I thought, the cryptic reports that “somebody already working at the CFPB” could include Richard Cordray. As it turns out, that’s who Obama nominated.
If you were driving along M-14 in Ann Arbor this morning, you may have heard somebody shout, “Yes! Yes! Yes!” That was me. This is extremely good news for consumer advocates. Cordray was a fierce defender of consumers. He took a leading role in a fifty-state investigation into the banks’ use of fraudulent affidavits in consumer cases and has aggressively enforced Ohio’s consumer protection statutes against some large players.
If I could choose somebody to head the CFPB, it would still be Elizabeth Warren. But Richard Cordray is a very close second. Before anybody on the left calls Obama’s decision not to nominate Warren a “betrayal of consumers” or anything like that, take a minute to look at Cordray’s record. This is fantastic news.
President Barack Obama has chosen a candidate other than Elizabeth Warren as director of the new Consumer Financial Protection Bureau, according to a person briefed on the matter.
The president’s choice is a person who already works at the consumer agency, the person said today. Obama may make the nomination as soon as next week, another person briefed on the administration’s plans said.
The people, who spoke on condition of anonymity because the process isn’t public, didn’t give the name of the choice.
We seriously need to quickly find a way to let Obama know convincingly that the left does not consider his reelection essential.
Please let President Obama know you want this position to go to Elizabeth Warren. There is time if we all act right now. I’ll make it easy and provide the link: Click here.
“Republicans were clearly also hoping that if they threw enough mud, some of it would stick. For people like Ms. Warren — people who warned that we were heading for a debt crisis before it happened — threaten, by their very existence, attempts by conservatives to sustain their antiregulation dogma. Such people must therefore be demonized, using whatever tools are at hand.” - Paul Krugman - March 20, 2011
It stuck. Congratulations, Republicans.
Take this news as a clear indication that President Obama absolutely will cave to partisan pressure.
Welcome to America. Get a job. Papers, please.
For those interested, you can watch the CSpan video of the hearing this week here.
|—||— Rep. Mike Quigley (D-Ill.), commenting on the hostile reception given to Elizabeth Warren at a hearing Thursday before the House Committee on Oversight and Government Reform, quoted in Elizabeth Warren’s Summer Grilling - The Daily Beast (via tartantambourine)|
The pomp and ceremony may have been premature. Ever since the law’s passage, those same “powerful interest groups” who opposed Dodd-Frank have been trying to prevent it from taking effect. As written, the law delayed implementation of most of its new rules for at least 12 months so regulators would have time to hammer out the finer points of the 2,319-page bill. But that delay has also provided an opening to banks and other financial institutions seeking to defang the law. “Just because we lost that round,” says Cam Fine, president of the Independent Community Bankers of America, which spent $1 million in the first three months of this year to lobby against implementation, “doesn’t mean we just give up. Congress changes its mind all the time.”
Take what’s been happening with the Consumer Financial Protection Bureau, which is the law’s most significant and controversial provision. The agency is set to go live next week, except that Republicans in the Senate have made it clear they won’t confirm anyone to serve as its head unless the agency is radically scaled back. All told, Dodd-Frank has some 300 provisions, and the bulk of them are under attack by a number of foes, from bankers to check-cashing companies to free-market Republicans.
And so it is, says a discouraged Rep. Barney Frank, that his eponymous bill is “facing a death through a thousand cuts.”