The supreme court debate that could impact your finances
Washington-- Since it’s creation in 2010, the Consumer Financial Protection Bureau (CFPB) has returned more than $12 billion to Americans. That could include you since more than 29 million people received money.
But the Agency’s existence is being debated at the highest court in the land, the U.S. Supreme Court. The question looks simple: can Congress create an Agency whose single director is only removable “for cause”. The law that created the CFPB set a fix 5-year term for the director, but the President’s solicitor general is arguing that violates the constitution.
"The president stands for election," Francisco said. "The director of the CFPB does not."
This thorny issue saw vigorous debate in front of the Court with the more liberal members making the case it is a “modest restraint”.
As Justice Ginsburg said during the hearing, “"It stops the president from at whim removing someone, replacing someone with someone who is loyal to the president rather than to the consumers that the Bureau is set up to serve. Congress passed this law so consumers would be better protected against financial fraud."
And she is right. The Agency was created after the Great Recession to protect Americans from financial fraud. In recent years, it has taken on Wells Fargo for opening fake accounts, prevent identity theft in the wake of the Equifax data breach, and returned money to consumers who’ve been wronged.
But the new director Kathleen Kraninger, is refusing to defend the CFPB’s structure as constitutional.
As one consumer advocate, Ed Mierzwinski, put it when filing an amicus brief supporting the CFPB, “Now, the CFPB’s director is actively working with the Trump administration and a debt collection law firm, of all things, to undermine the Bureau. We know from how things played out before the CFPB opened its doors that Americans can’t afford to let that happen.”
WHAT THIS MEANS FOR CONSUMERS
More than 1.5 million complaints were filed with the agency since the start of it’s “Consumer Complaint Database”. And almost every single time companies responded in a timely manner. They’d lack that incentive without the agency willing to help consumers navigate their problems.
An analysis of complaints by U.S. PIRG Education Fund found,
Nearly half of the complaints in the database are filed against ten companies: Equifax, Experian, TransUnion, Bank of America, Wells Fargo, JPMorgan Chase, Citibank, Capital One, Navient, and Ocwen.
The three nationwide credit reporting agencies - Equifax (9% of complaints), Experian (8%) and TransUnion (7%) - are the most complained about companies in the database. They have also been the most complained about companies for each of the past four years.
“Credit reporting, credit repair services, or other personal consumer reports” complaints made up 43% of total complaints in 2018, up from 23% of total complaints in 2016.
“Credit reporting, credit repair services, or other personal consumer reports” is the most complained about product category in 29 states and the District of Columbia, with Equifax receiving the most complaints in 25 states and the District of Columbia.
69 percent of complaints in the database are about three products: “credit reporting, credit repair services, or other personal consumer reports,” “mortgage,” and “debt collection.”
97 percent of complaints received a timely response. Additionally, more than 223,000 complaints resulted in relief for consumers, including more than 75,000 who received monetary relief from the companies they complained about.
While some are concerned the Court could decide to strike down the entire agency, creating massive chaos around the numerous financial protections they’ve put in place, others are more measured. It is more likely the CFPB will stay in place with a director the President can fire at will.
In the meantime, file your financial complaints if you have them.
