Americans for Financial Reform (AFR), a nonpartisan and nonprofit coalition of more than 200 civil rights, consumer, labor, business, investor, faith-based and civic and community groups, made a showing at the latest congressional hearing on the Consumer Financial Protection Bureau (CFPB) on May 18. The group appeared with lime-green tee-shirts that read “Stand Up for the CFPB” and “The CFPB Has My Back.”
“They were there to remind lawmakers that the great majority of Americans, across party lines, don’t just like the idea of such an agency; they also support the major steps it has taken to bring a sense of fair play to the financial marketplace,” the group said in a statement on its website.
The group lent its support to the CFPB both in terms of the recent appropriations bill that attempts to weaken its power and the bureau’s proposed bill that would limit the use of mandatory arbitration clauses in consumer contracts.
“In what has almost become an annual ritual, the 2017 Financial Services and General Government appropriations bill set for mark-up in the House of Representatives today is packed with policy riders that would loosen rules, weaken agencies charged with protecting the public interest, and make it easier for Wall Street banks, shadow banks and predatory lenders to take advantage of consumers and investors,” the group said in a statement.
The appropriations bill attempts to reform the CFPB by replacing the director with a bipartisan five-member commission and fund it through congressional appropriations, rather than directly from the Federal Reserve. Another measure would prohibit the CFPB from issuing final regulations governing mandatory arbitration agreements until it meets unspecified conditions.
“Each of these riders would erode gains made through the financial reforms adopted after the 2008 crisis – a goal that commands virtually no support from voters of either party. The impetus for them comes from financial industry lobbyists who are hoping to use backdoor means to achieve unpopular ends,” the group continued.
Recently, AFR and 253 allied organizations sent a letter calling on lawmakers to reject any funding bills that include provisions rolling back or undermining financial reform. A group of consumer advocacy organizations also teamed up recently to applaud the CFPB’s proposed arbitration rule.
“In forced arbitration, consumers lose the right to argue their case before an impartial judge and jury. Instead, big banks and abusive lenders are able to hire a private arbitration firm of their choosing to decide the dispute, and consumers have little opportunity to present evidence or appeal a bad decision,” the groups said in a joint statement.
“Nearly all financial ripoff clauses prohibit participation in class actions and even bar consumers from talking about what happened to them — which means that the public often never learns about corporate scams or fraud,” the statement continued. “While the CFPB’s current proposal does not end forced arbitration, it does prohibit companies from using one of the most damaging and common elements of the practice — bans on class actions. These bans prevent consumers who have suffered similar harms from joining together to take on a corporation as a group, effectively eradicating consumer claims and allowing corporations to break the law without consequence.”