Washington, D.C. – In its six-year existence, the Consumer Financial Protection Bureau (CFPB) has proved itself integral to curbing predatory lending and other practices that harm American consumers every day, a survey from the National Association of Consumer Advocates (NACA) shows. The survey found that consumers and their advocates enforce and rely on the CFPB to help resolve private disputes with financial institutions, and that they regularly provide the agency with evidence of improper practices in communities across the country – information that furthers CFPB research and investigations.
The survey, conducted in December 2017, documents how advocates who represent consumers with financial disputes interact with the bureau. Of the respondents, 96 percent reported that the CFPB has been “very helpful” (76 percent) or “somewhat helpful” (20 percent) in their representation of their consumer-clients. Every responding legal services attorney – that is, advocates who provide free, civil legal assistance to low-income people – reported that the CFPB has been helpful (86 percent said “very helpful”) in their work.
“The bureau’s work over the past six years – protecting homeowners, student loan borrowers, payday loan victims, older adults, servicemembers, and other American consumers from harmful financial practices – was deeply felt in communities across the country,” said Christine Hines, NACA’s legislative director.
Congress created the CFPB in 2010 after the 2008 financial crisis, which exposed widespread predatory lending and abuses against homeowners, borrowers and other consumers. The Dodd-Frank Wall Street Reform and Consumer Protection Act gave the agency the power to monitor and provide safeguards for consumers against unfair and illegal business practices.
The survey revealed that advocates rely heavily on the CFPB consumer complaint system to help individuals (only 10 percent had never interacted with the complaint database); great appreciation of CFPB enforcement actions (72 percent reported that they had extracted information from consent orders to assist consumers); and reliance on agency-issued rules as safeguards for consumers caught in disagreements with powerful lenders, loan servicers, and banks (79 percent had taken information from CFPB rules or guidance to aid individual consumers).
“For borrowers struggling to stay in their homes, like my clients, who regularly encounter aggressive and exploitative business practices from their mortgage servicers, the CFPB has become vital in both providing relief and in collecting and using data and feedback from the public,” said Sarah White, a staff attorney at the Connecticut Fair Housing Center.
In December, White assisted homeowner Sally Horvath of Connecticut in submitting a complaint to the CFPB against a mortgage servicer, which Horvath said sued her for foreclosure and charged her more than $1,300 in fees, all while she was partaking in the servicer’s own process to modify her loan terms. Horvath claimed the servicer’s actions violated CFPB’s mortgage servicing rules. The servicer responded to Horvath’s CFPB complaint, acknowledging a “miscommunication,” removed the fees, and sent Horvath a $500 check for the inconvenience.
“In a nutshell, this survey of consumer advocates illustrates that Americans need the CFPB,” said Ira Rheingold, NACA’s executive director. “Any action to delay or reverse rules, deprive CFPB of funding, stop data collection, interfere with the public complaint system, or weaken enforcement work, will devastate millions of people if they can no longer rely on the bureau’s vigilance to protect them from ripoffs.”
Survey results can be found here.