Letters to the editor are among the most widely read features in newspapers and other local publications. They allow writers to reach a large audience. Here are some important points that you may want to mention in your letter-to-the-editor to support the CFPB and its rulemaking on arbitration.
What is the Consumer Financial Protection Bureau?
- The CFPB is a federal agency created in 2010 with the goal of ensuring consumers are not ripped off by Big Banks and other financial institutions.
- The Consumer Financial Protection Bureau (CFPB) was created in the wake of the financial crisis to stand up for consumers and make sure they are treated fairly in the consumer financial marketplace.
What has the CFPB done for consumers and the financial marketplace?
- The CFPB has implemented new, common-sense mortgage rules to protect consumers against the problems that led to the housing crisis.
- The CFPB has handled over one million complaints from consumers about their problems with financial products and services.
- The CFPB has addressed discriminatory financing in auto lending.
- The CFPB’s enforcement work and the consumer complaints it has handled have resulted in millions of dollars in monetary relief to consumers as well as other remedies, such as cleaning up credit reports or correcting the terms of a loan.
- The CFPB is developing proposed rules to protect consumers from harmful debt collection practices and the worst payday loan debt traps.
- The CFPB has taken legal actions against:
- Credit card companies for engaging in unfair, deceptive, and abusive practices related to marketing, billing, and enrollment for credit add-on products and services;
- Banks for charging overdraft fees to consumers who had not agreed to overdraft services;
- Payday lenders for pressuring borrowers into debt traps;
- For-profit colleges for exploiting students and pushing them into unaffordable loans;
- Debt collectors for using illegal tactics to intimidate consumers into paying debts they may not owe;
- Mortgage companies for wrongly foreclosing on consumers’ homes.
What are the main attacks on the CFPB?
They are plans by Wall Street lobbyists and their allies in Congress to cripple the CFPB’s ability to function as an effective and politically independent watchdog. Specifically, they hope to:
- Put the CFPB under a five-member commission chosen by party leaders, instead of a single director, and
- Take away its independent funding, forcing the agency to depend on annual congressional appropriations.
Here’s the problem with these proposals: Big banks would be able to use the politically charged appropriations process to deny funding for rulewriting or enforcement actions. They could take away the basic funds it needs to do its job, or threaten to do so in order to intimidate the agency out of taking actions to curb abuses by powerful companies. Multi-member boards often fall into a pattern of gridlock, inactivity, and a chronic unwillingness to challenge the industries they are charged with overseeing.
American consumers support the CFPB:
- Poll: More than nine in 10 voters agree that it is important to regulate financial services and products in order to make sure they are fair for consumers.
- Poll: Majorities of Americans across party lines (70 percent of Democrats, 52 percent of Republicans, and 69 percent of Independents) approve of the CFPB’s efforts to restore the ability of financial consumers to band together in lawsuits against banks and lenders that engage in wrongdoing.
What is forced arbitration and the CFPB forced arbitration rulemaking?
- The Dodd-Frank-Wall Street Reform & Consumer Protection Act granted the CFPB authority to prohibit forced arbitration clauses in consumer financial contracts.
- The CFPB has issued a proposed rule that would eliminate arbitration clauses in financial services contracts that ban class actions.
- Arbitration clauses are inserted into the fine print of many consumer contracts, including for financial products and services such as credit cards, checking accounts, prepaid cards and student loans.
- Forced arbitration means that when a dispute arises between a consumer and a company, the consumer is denied access to courts, and must settle disputes with powerful corporations, including banks and lenders, in a private arbitration system.
- Arbitration clauses include other restrictive terms such as prohibiting consumers from banding together in class actions.
- Companies determine the location of arbitration proceedings, set the rules of the game, and name the firm that must be used in arbitration.
- Corporate wrongdoers are able to avoid accountability by using forced arbitration because it can be expensive, it’s biased, and it lacks court oversight.