Most Americans say they don’t have a clue about this federal agency…
The Consumer Financial Protection Bureau may have an image problem as well as a political problem.
More than 80% of people said they did not know enough about the Consumer Financial Protection Bureau to form an opinion of it, a survey carried out this month and released Thursday by the credit-card website CreditCards.com found. These results are supported by a previous study commissioned in 2013 by the nonprofit Americans for Financial Reform, a progressive nonprofit advocating for financial reform. It found that 40% of respondents had either never even heard of the CFPB or had no opinion of it.
Republicans are expected to roll back some elements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which former U.S. President Barack Obama signed into law in 2010. That Act, which President Donald Trump’s transition team said it would “dismantle,” created the CFPB to regulate financial institutions and hold them accountable. CFPB’s Democratic-appointed director Richard Cordray told CNBC Thursday that the CFPB’s mission and actions are “consistent with what most Americans want.”
For his part, Cordray suggested that people would know soon enough if the CFPB did not exist. “What do people do when they’re suddenly being harassed by a debt collector, called at all hours of the day and night? Can’t get them off their back, can’t get them to realize that maybe this debt isn’t one that they even owed in the first place,” he said. “To have somebody who will stand on their side who will try to do something about it. I think people want that.”
Some experts have predicted the Trump administration could make changes including firing Cordray. Republicans and some in the financial industry have criticized the CFPB, citing it as an example of government overreach, but the government hasn’t made those changes, such as removing Cordray from his position or restructuring the CFPB in other ways, as other initiatives including taxes, health care and infrastructure spending have taken precedent.
And yet despite the fact that Cordray may have a political target on his back, many Americans indicate they would in theory support an agency like the CFPB, if they knew it existed. Some 80% of respondents in the CreditCards.com survey said they were in favor of having a federal government agency whose goal is to “protect consumers from unfair, deceptive or abusive practices and take action against companies who break the law.” The irony? That description CreditCards.com took from the CFPB’s mission statement, without naming the agency.
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(The CFPB did not respond to request for comment on the survey or the reported mounting pressure on the agency from the Trump administration. A CFPB spokeswoman previously told The Wall Street Journal that Cordray is appointed to serve until July 2018, and he has no plans to step down.)
The lack of CFPB name recognition isn’t surprising, said Rohit Chopra, a senior fellow at the Consumer Federation of America, an association of nonprofit consumer organizations, who used to be an assistant director at the CFPB. Although consumers are likely aware of actions the CFPB has taken, they may not associate the name of the agency with those actions. “When you fly on an airplane and it doesn’t crash, you don’t necessarily think about the FAA’s oversight,” he said. “When you drink a glass of water and don’t get poisoned, you don’t think about the regulators making sure that it’s not poisonous.”
The CFPB sued Navient Corp., the largest servicer of federal and private student loans in the U.S., in connection with creating obstacles for borrowers to repay their debts, in January. For its part, Navient said the allegations were unfounded. It also fined MasterCard MA, +0.37% and entrepreneur Russell Simmons’s prepaid card business, UniRush, for breakdowns in their reloadable RushCards that left customers unable to access their accounts. The companies were ordered to pay $ 10 million back to their customers who were affected. A MasterCard spokesman said the agreement further compensated customers for the inconveniences. Simmons called the incident “one of the most challenging periods in my professional career.”
And the CFPB has made some recent regulatory decisions consumers likely have heard about.The agency fined Wells Fargo WFC, +0.31% $ 100 million in September 2016 for alleged illegal practices including opening as many as two million deposit and credit card accounts without customers’ knowledge. (Wells Fargo did not confirm or deny the charges but agreed to pay the fine and later fired more than 5,000 employees because of “improper sales practices.”) Republicans said the CFPB acted slowly on the Wells Fargo case.
On CNBC Thursday Cordray was asked whether he has too much power. “I have to be accountable to Congress,” he said. “I have to testify in front of them four times a year. And if we get something wrong, we fix it, just like everybody else does.”