[Congressional Record Volume 164, Number 58 (Wednesday, April 11, 2018)]
[House]
[Pages H3141-H3144]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROTECT AMERICAN CONSUMERS AND DEFEND THE CONSUMER FINANCIAL PROTECTION
BUREAU
The SPEAKER pro tempore (Mr. Gaetz). Under the Speaker's announced
policy of January 3, 2017, the Chair recognizes the gentlewoman from
New York (Mrs. Carolyn B. Maloney) for 30 minutes.
Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, thank you so much.
We are here today to declare our strongest resolve and determination to
protect American consumers and defend the Consumer Financial Protection
Bureau.
The Bureau is under assault by the current administration, the
Republican administration, and we will do everything in our power to
guard it and to protect it so that it can protect consumers.
I am pleased to stand here with Democratic House members of the
Financial Services Committee and of the Joint Economic Committee. I
would like to thank Ranking Member Maxine Waters for her leadership and
for working collaboratively with me to organize this important Special
Order.
{time} 1915
It is fitting that the Financial Services Committee Democrats lead
efforts to protect the Consumer Financial Protection Bureau, because we
created it in 2009 when we passed the landmark Wall Street Reform and
Consumer Protection Act, known as Dodd-Frank for Senator Chris Dodd and
our former colleague and chairman, Barney Frank.
It is also fitting that Democratic House Members of the Joint
Economic Committee participate because the attack on the CFPB not only
hurts consumers, but harms businesses and our overall broader economy.
Let's put things in historical perspective. During the last 2 years
of the George W. Bush administration, we suffered what former Federal
Reserve Chairman Bernanke called ``the worst financial crisis in global
history, including the Great Depression.''
The former Chair of the Joint Economic Committee for President Obama,
Christina Roamer, said that the economic shocks during that period were
five times greater than the Great Depression.
In the last month of the Bush Presidency alone, our economy lost over
800,000 private sector jobs. We were hemorrhaging 800,000 jobs a month.
Nearly $13 trillion in household wealth was completely lost. Home
values plunged, on average, by almost 20 percent. Millions of people
lost their homes. And at the peak of the recession, unemployment
reached 10 percent. African-American unemployment reached almost 17
percent, and Latino unemployment was 13 percent.
In short, millions of Americans lost their jobs and millions lost
their homes. At the root of the economic crisis were bad mortgages sold
to families that could not afford them, a lack of consumer protections
to shield Americans from financial predators.
No single government agency was dedicated to protecting consumers.
They were dedicated to protecting banks and other financial
institutions. But often consumer concerns was a secondary thought, a
third thought, or not thought about at all.
So Democrats wrote and passed into law the Wall Street Reform and
Consumer Protection Act, and at the heart was the Consumer Financial
Protection Bureau. Its sole purpose was to prevent this type of
economic disaster and to protect consumers.
Consumers want and need protection. The Federal Government sets and
enforces safety standards on a wide variety of consumer goods. But
until 2010, with the passage of the Wall Street Reform and Consumer
Protection Act, there were few protections for consumers of financial
products--and many, many abuses.
Senator Elizabeth Warren, in her groundbreaking article, called for
the creation of an agency dedicated solely to protecting consumers of
financial products, pointed out the absurdity of not protecting
consumers:
``It is impossible to buy a toaster that has a one-in-five chance of
bursting into flames and burning down your house. But it is possible to
refinance an existing home with a mortgage that has the same one-in-
five chance of putting the family out on the street. . . .''
What is good enough for toasters and washing machines and cars, she
argued, is good enough for mortgages. And it certainly would help our
people. She was right. And that is a primary reason that we must defend
the original mission of the CFPB today.
Ranking Member Waters will describe some of the excellent work of the
CFPB, which they have done to protect consumers.
Three numbers bear pointing out: In the first 6 years, the CFPB
handled more than 1.2 million complaints and has delivered almost $12
billion--billion, as in B--in relief, and sent that money back to
consumers for their use in their pockets and their homes, to nearly 30
million consumers who had been harmed.
My Republican colleagues call this ``regulatory overreach'' or
government run amuck. They want the CFPB to be less aggressive. In
other words, they don't want the CFPB there to protect
[[Page H3142]]
and help consumers. In fact, it is doing exactly what it is intended to
do: protect ordinary Americans against financial predators.
I dare opponents of the CFPB to inform those 30 million Americans who
have received almost $12 billion in relief of their plans to weaken the
agency. For those who want to neuter the CFPB and consumer protections,
it is outrageous, it is wrong, and Democrats are going to fight this
like you would never believe.
I would like to draw your attention to one very important function of
the CFPB: enforcing the Credit Cardholders' Bill of Rights, the CARD
Act, which I am proud to have authored.
The CARD Act prevents what were some of the worst abuses of the
credit card industry. It used to be almost out of control. You couldn't
walk on the floor or down the street without people coming up to you
and telling you stories about credit card abuses.
The bill was common sense. It cut out unfair, deceptive,
anticompetitive actions by restricting fees. It protected consumers
against retroactive rate increases on existing balances. In order to
increase the rate, the consumer had to opt in and agree to an increased
rate.
What happened before is they would be told you can buy a car for
$8,000 at a 6 percent interest rate. They would buy the car, then all
of a sudden the rate was up to 20 percent, 30 percent, and consumers
were caught in a never-ending cycle of debt.
This bill requires the lenders to alert consumers of any rate
increases, prevents double billing, and prevents lying. If you say your
rate is one rate, then that is what the rate has to be. It prevents
credit card companies from raising credit limits for people who can't
repay the debt.
In 2016, the CFPB report found that the CARD Act alone saved American
consumers over $12 billion. That is 12 billion, as in B. I call it the
Democratic stimulus plan because it kept the money in the consumers'
hands and not in fees that were unfair.
But it is not enough just for the CARD Act to exist. It also has to
be enforced. Enforcement of existing laws has been a critical function
of the CFPB.
Few would deny that the CFPB has been ver effective. That is why I
believe the opponents, the Republican majority and others, are
attacking it.
The Trump administration has launched an assault on the CFPB.
President Trump illegally appointed a man to head the CFPB who once
said that he wished it didn't exist. As a Member of Congress, he
sponsored a bill to abolish it.
Now, why would you put someone in charge of an agency who says they
want to abolish it, unless you want to abolish it?
This follows in the pattern of other appointments in this
administration: putting people in charge of an agency that they
fundamentally oppose.
Now that Mick Mulvaney runs the CFPB, he is taking radical steps to
make it ineffective. This means weakening consumer protections and
restricting enforcement.
We had a hearing today at the Financial Services Committee this
morning, and I asked him how many enforcement actions he has taken
since he has started as the Acting Director for 5 months? His answer
was none, zero.
Now, under the former Director, Richard Cordray, the Bureau took
roughly 70 enforcement actions. They were bringing one roughly every
week to protect consumers. But now, under Mulvaney, they are bringing
absolutely none.
Weakening the CFPB and loosening consumer protections will make tens
of millions of American families vulnerable. But it will also affect
the economy via an indirect route.
A lack of effective protections will make it difficult for consumers
to differentiate good products from bad. Reputable financial
institutions that treat their consumers fairly--and there are many of
them--will suffer with this uncertainty, and they will be incentivized
to copy their disreputable competitors in a race to the bottom.
In this way, weak consumer protections can slow economic growth. As
it turns out, what is good for consumers is also good for the economy.
We have other people who are here to speak, but I do want to say
that, in some ways, at the heart of a financial crisis was a lack of
consumer protection. Predatory lenders were able to sell bad mortgages.
It was immensely profitable. They were what we called NINJA loans for
people with no income, no job, and no assets.
In New York, they used to say that, if you can't afford your rent, go
out and buy a house; it is easy to do. They were handing out bad loans
and then securitizing mortgages on the secondary market, which were
destined to fail. And they bought insurance--default swaps--to
supposedly eliminate risk, which, in fact, only made it riskier. A
giant wave of mortgage defaults ignited the financial crisis, leading
to the worst economic crisis since the Great Depression.
Economists have said over and over again we could have saved our
economy from this terrible $15 trillion loss of home values and home
assets if we just had good management and protection of consumers. And
it all began with a mountain of bad mortgages, many of them unfair and
predatory. If the CFPB had existed at that time and if it had
implemented current mortgage standards, we would not have had that
financial crisis.
So I would say Mick Mulvaney and other opponents of the CFPB should
have learned a lesson from the catastrophic financial crisis that
caused many Americans to lose their homes and their jobs, and we are
still recovering.
The philosopher, George Santayana, said that those who forget the
past are destined to repeat it. So now the effort by the Republican
majority to roll back the protections from the Wall Street Reform Act
and to roll back the protections from the CFPB are increasing the
probability of another catastrophe. We don't want that to happen, and
that is why we defend Dodd-Frank, and that is why we will fight to
oppose efforts, in any way, shape, or form, to weaken the CFPB.
Why in the world would anyone want to weaken protections for working
men and women?
Now, one of the great leaders in this country for working men and
women and for fair treatment under the laws of our country is the
esteemed ranking member of the Financial Services Committee from the
great State of California, Ms. Maxine Waters, a tireless advocate for
consumers and the work of the CFPB. She has led Democrats on numerous
efforts to maintain the structure, independence, and power of the
Consumer Financial Protection Bureau so that it can continue working
for you, working for the people, the American families, the consumers
that we have in our country.
Mr. Speaker, it is now my honor to yield to the gentlewoman from
California (Ms. Maxine Waters), the distinguished ranking member.
{time} 1930
Ms. MAXINE WATERS of California. Mr. Speaker, I thank Congresswoman
Maloney for helping to make sure that we come to the floor this evening
so that we can speak up for the Consumer Financial Protection Bureau.
Mr. Speaker, I rise this evening, along with my Democratic colleagues
on the Financial Services Committee, to discuss a central component of
the Dodd-Frank Wall Street Reform and Consumer Protection Act, the
Consumer Financial Protection Bureau.
Mr. Speaker, I really want to thank my colleague, Mrs. Maloney, for
organizing this event with me tonight. Mrs. Maloney is a valuable
member of the Financial Services Committee and she is also a leader on
the Joint Economic Committee, she serves on the Oversight and
Government Reform Committee.
She is a very, very busy Member of this Congress, and I don't know
exactly how she finds time to do everything that she does, but I am so
grateful for the opportunity to serve with her, because of her
dedication and her commitment, not only to her constituents, but to the
citizens of this country, and particularly focused on consumer
protection.
The Consumer Bureau is vitally important in protecting American
consumers from unfair, deceptive, or abusive practices by financial
institutions all across the country.
Following the financial crisis, Congress created the Consumer Bureau
in order to ensure that Americans have a regulator solely focused on
ensuring that they are not preyed on by bad actors. The need for such
an agency was
[[Page H3143]]
made very clear by the 2008 crisis, which was driven by unchecked,
deceptive, predatory lending that caused millions of American families
to lose their homes.
The Consumer Bureau has been an enormous success, and under the
leadership of Richard Cordray, the agency worked exactly as we intended
it to. The Consumer Bureau has returned nearly $12 billion to over 30
million consumers who have been harmed by financial institutions. The
agency has also addressed more than 1.2 million consumer complaints
about financial institutions.
But now Donald Trump has moved to ``do a big number on Dodd-Frank''
and undermine the Consumer Bureau. Despite the fact that the Dodd-Frank
statute is very clear that the deputy director of the Consumer Bureau
shall serve as acting director in the absence or unavailability of the
director, President Trump illegally appointed his Office of Management
and Budget Director, Mick Mulvaney, to serve as acting director.
Because Mr. Mulvaney serves at the pleasure of the President as OMB
Director, President Trump now has an inappropriate level of influence
over the operations and activities of the Consumer Bureau, which is an
independent agency that is supposed to be outside of the authority of
the executive branch.
Since his illegal appointment, Mr. Mulvaney has indeed been carrying
out President Trump's harmful agenda and working to reverse much of the
important progress that the agency has made. This is not surprising
given that Mulvaney previously stated, ``I don't like the fact that the
CFPB exists,'' and even called the Consumer Bureau a sick, sad joke.
In his short time at the Consumer Bureau, Mr. Mulvaney has stripped
the Office of Fair Lending and Equal Opportunity of its enforcement and
supervisory powers, in a move that badly weakens the agency's ability
to crack down on discriminatory lending. He has also taken zero public
enforcement actions against financial institutions that harm consumers
across the board during his tenure, even though his predecessor,
Richard Cordray, initiated hundreds.
In addition, Mr. Mulvaney has taken a series of actions that benefit
predatory payday lenders, including the decision to halt implementation
of the Consumer Bureau's sensible payday rule, the decision to withdraw
a lawsuit against a group of payday lenders that allegedly misled
consumers about the cost of loans, which had interest rates as high as
950 percent a year, and the decision to cease an investigation into
World Acceptance Corporation, a high-cost installment lender which was
reportedly engaging in abusive practices. And, in fact, the former CEO
of World Acceptance Corporation felt so comfortable with Mr. Mulvaney,
that she had the audacity to send to him a letter requesting that she
be appointed to run the whole agency as the director.
So many of us were shocked at the audacity that she exhibited, and
tried to find out from Mr. Mulvaney today, I did in particular, why did
he halt the lawsuit against her company and why would she send him her
resume to ask to be considered for the role of director of the Consumer
Bureau.
Mr. Mulvaney's many harmful actions send a signal to bad actors that
they can get away with abusing consumers.
What is more, Republicans have relentlessly attacked the Consumer
Bureau since its inception. Despite what my Republican colleagues may
have you believe, the leadership structure of the Consumer Bureau is
not unique. In fact, there are other Federal regulatory agencies with
similar structures, but these facts haven't stopped Republicans and
some in the industry from making legal challenges to its structure.
That is why last year, I led 40 other current and former Members of
Congress to file a brief with the D.C. Circuit Court of Appeals in the
P.H.H. case support of the Consumer Bureau's independent structure and
its clear constitutionality. And earlier this year, the court issued a
decision upholding the constitutionality of the Consumer Bureau's
structure.
Republicans have been clamoring to weaken, impede, and ultimately
destroy the Consumer Bureau since its creation. First, they did
everything they could to block a director from being appointed in the
first place, and since then, they have pushed measures to defund and
dismantle the Consumer Bureau. The chairman has called for the Consumer
Bureau to be ``functionally terminated,'' and advanced legislation,
including H.R. 10, which I call the ``Wrong'' CHOICE Act, to do so.
Now, in Mick Mulvaney, Republicans have an ally to destroy the
Consumer Bureau from within, but it is unclear why destroying the
Consumer Bureau is at the top of the Republican agenda.
There are constituents in every State who have been ripped off by
financial institutions. Why aren't Republicans fighting for them and
for their financial security?
Mr. Speaker, Democrats will not allow the Consumer Bureau to be
diverted from its statutorily mandated mission of protecting consumers
and serving as an independent watchdog.
This agency is crucial for hardworking Americans, and its work must
continue.
Mr. Speaker, in my closing, I would like to thank Congresswoman
Maloney for the way that she conducted her questions today with Mr.
Mulvaney in our committee and asked him how many cases had he taken up,
what had he initiated against those companies that are committing
fraud, only to find out that he has done nothing. She forced him to
answer, and he had to admit, zero, that he has not taken any actions
against any companies in this country who are involved in the kind of
actions that the Consumer Bureau is designed to deal with and to force
them to do the right thing.
So, Mr. Speaker, in that, I would like to thank Congresswoman Maloney
for initiating this action this evening that we are taking to make sure
everyone understands the importance of the Consumer Financial
Protection Bureau, and I appreciate working with her to get this done.
Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I thank the
gentlewoman for her statement tonight and for her leadership.
Mr. Speaker, I yield to the gentleman from the great State of Nevada
(Mr. Kihuen), and we welcome him.
Mr. KIHUEN. Mr. Speaker, I thank Representative Maloney and Ranking
Member Waters for providing me this opportunity to speak about the
critical importance of the Consumer Financial Protection Bureau, the
CFPB.
Mr. Speaker, during the recession, Nevada was ground zero for the
housing crisis.
For 5 years, Nevada led the Nation in foreclosures. In 2010, 70
percent of Nevada homeowners were underwater on their homes. I saw
firsthand as family, friends, neighbors, and constituents who lost
their homes because of big banks and unscrupulous mortgage lenders.
While Nevada has made a tremendous recovery since the recession, the
scars are deep and still fresh.
In the wake of the financial crisis, the CFPB was created to protect
Americans from unfair, deceptive, or abusive practices that led to the
financial crisis, and to take action against companies that break the
law.
The CFPB has cracked down on predatory lenders and aggressive debt
collectors, and forced financial institutions to return over $11
billion to Americans who have been taken advantage of.
Since 2011, the agency has been a resource for thousands of my
constituents. More than 14,000 Nevadans have gone to the CFPB with
complaints, and over 3,400 of them about mortgages.
It is appalling that Mr. Mulvaney and congressional Republicans are
focused on destroying the CFPB at the expense of American families.
When someone has an unwarranted overdraft, an incorrect credit score,
or is misled by their bank, they turn to the CFPB for help.
I will do everything I can to ensure that Nevadans never again have
to experience the pain of being foreclosed on or being preyed upon by
unscrupulous lenders.
The cost to consumers is not only their livelihoods, but the future
of our economy, because a strong economy includes a strong consumer.
Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I thank the
gentleman for his really heartfelt report to us on how it affected his
constituents.
[[Page H3144]]
Mr. Speaker, I include in the Record an article in Roll Call on the
importance of the CFPB, and also the actions that the Consumer
Financial Protection Bureau has taken by the numbers to help people in
our country.
Mulvaney's Attacks on CFPB Hurt Consumers and Economy
(By Rep. Carolyn Maloney)
As a congressman, Mick Mulvaney once co-sponsored a bill to
abolish the Consumer Financial Protection Bureau. And since
being appointed by President Donald Trump to temporarily lead
the agency, he has worked to cripple it from the inside.
What he is doing will hurt consumers not once but twice--
first, by letting off the hook financial institutions that
take advantage of their customers, and second, by giving
other companies large incentives to do the same.
In its first six years, the CFPB has handled more than 1.2
million complaints and delivered almost $12 billion in relief
to nearly 30 million consumers. It has put in place new
protections against payday lending, investigated predatory
payday lenders, fought mortgage servicers for wrongful
foreclosures, established new mortgage standards to protect
homebuyers, and required lenders to verify that borrowers
have the means to repay their loans. It also banned financial
institutions from using arbitration clauses to deny consumers
the right to sue, took action against companies for illegal
collection of student loan debt, ordered Wells Fargo to pay
full restitution to customers for opening accounts without
their consent, enforced the Credit Cardholders' Bill of
Rights, published a public database of consumer complaints,
and established extensive educational materials on financial
products for consumers.
Sen. Elizabeth Warren, D-Mass., who was the driving force
behind the CFPB's creation, has pointed out that we shouldn't
put people in charge of agencies they want to destroy. That
seems self-evident--unless the specific goal is to destroy
it.
Soon after his appointment, Mulvaney began weakening and
radically changing the CFPB, stating that part of the
agency's new core mission statement would be to deregulate
financial products by ``regularly identifying and addressing
outdated, unnecessary or unduly burdensome regulations.''
He has zealously pursued this new mission by putting a
freeze on the implementation of all new rules, delaying long-
planned rules to protect users of prepaid cards, halting the
agency's investigation of Equifax for failing to protect
customers' private information, weakening rules against
predatory payday lenders, and pulling the plug on a suit
against payday lenders that charged annualized interest rates
of up to 950 percent. Mulvaney is trying to politicize the
agency by placing political appointees in positions normally
staffed by nonpartisan civil servants. He also tried to
starve the agency by requesting zero operating funds for the
second quarter of fiscal 2018.
The rollbacks won't just hurt consumers, they will also
hurt our economy. Fair regulations that protect consumers are
essential for well-functioning markets. Without effective
rules, we've seen that some companies will cheat their
customers. As word spreads, millions of consumers are forced
to question whether products are safe or secure. This
uncertainty leads them to buy less. Many businesses--even
those that treat their customers fairly--lose sales. The
economy suffers.
One would think that deregulators like Mulvaney would have
learned a lesson from the 2007-2008 financial meltdown, which
threw our economy into a devastating recession. At the root
of the crisis were the many lenders who convinced American
consumers to purchase mortgages they could not afford,
including the infamous NINJA loans to those with ``no income,
no job and no assets.'' At first, companies that sold these
predatory loans were on the outskirts of the industry, but
when regulators failed to step in to protect consumers, many
reputable companies that feared being left off the gravy
train jumped in.
The mountain of subprime mortgages, sold and repackaged as
securities presumably to eliminate risk, turned out to be a
house of cards, resulting in what former Federal Reserve
Chairman Ben Bernanke called ``the worst financial crisis in
global history, including the Great Depression.'' Millions of
Americans lost their jobs or their homes. It took nine years
for the economy to fully recover.
Fair regulations that are enforced rigorously are critical
not only to protect consumers, but because they are essential
for markets to work efficiently. Deliberate efforts to
undermine the CFPB will not only prove to be a raw deal for
millions of Americans but can cause lasting damage to our
economy.
____
Consumer Financial Protection Bureau: By the Numbers
$11.9 billion: Approximate amount of ordered relief to
consumers from CFPB supervisory and enforcement work,
including:
Approximately $3.8 billion in monetary compensation ordered
to be returned consumers as a result of enforcement activity
Approximately $7.7 billion in principal reductions,
cancelled debts, and other consumer relief ordered as a
result of enforcement activity
$398 million in consumer relief as a result of supervisory
activity
29 million: Consumers who will receive relief as a result
of CFPB supervisory and enforcement work
$600 million+: Money collected in civil monetary penalties
as a result of CFPB enforcement work
1,242,800+: Complaints CFPB has handled as of July 1, 2017
13 million: Unique visitors to Ask CFPB
10.5 million: Mortgages consumers closed on after consumers
received the CFPB's Know Before You Owe disclosures
147: Banks and credit unions under the CFPB's supervisory
authority as of April 1, 2017
12 million: Consumers who are takeout payday loans each
year; the CFPB has proposed rules to put an end to payday
debt traps
70 million: Consumers who are contacted about debts in
collection during the year; the CFPB is developing proposed
rules to protect consumers from harmful collection practices
3,270+: Colleges voluntarily adopting the CFPB and Dept. of
Ed Financial Aid Shopping Sheet
169: Visits to military installations by the Office of
Servicemember Affairs since 2011
63: Times senior CFPB officials have testified before
Congress
Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I want to thank all
of the hardworking people at the CFPB and those who worked to create
it, and I thank my colleagues and friends for joining me tonight on
this Special Order.
Mr. Speaker, I yield back the balance of my time.
____________________