Udall Urges Senate Colleagues to Empower Consumer Watchdog Agency, Confirm Director
Giving CFPB a Leader would Help Agency Protect Consumers, Enforce Better Business Practices
Today, Mark Udall spoke on the Senate floor about the critical need to confirm a director to lead the Consumer Financial Protection Bureau (CFPB) for the first time ever, allowing for stronger protections for American consumers. The Senate is set to vote Thursday on the nomination of Richard Cordray to head the CFPB, which would give the agency authority to protect consumers from unfair business practices.
Udall spoke strongly against the threat from some of his colleagues to filibuster all nominees to head the CFPB, which would hamstring the agency’s ability both to effectively monitor abuses against consumers and to implement stronger financial protections for them. Udall said the agency “may be one of the most important federal agencies we have,” and urged his colleagues to vote in Cordray to head the CFPB.
“Without his leadership and a strong CFPB to look out after the interests of consumers, we are putting the financial security of hardworking American families at risk – and the country’s economic recovery at risk,” Udall said. “By failing to give the CFPB a confirmed director, we’re actually reducing oversight of predatory lending and deceptive banking practices; these are practices that in no way help our economy.”
The CFPB would also enforce the implementation of Udall’s legislation to give consumers free access to their credit scores and ensure credit rating agencies treat consumers fairly. Udall has long criticized misleading ads, such as those by freescore.com and freecreditscore.com, that lure customers into a costly credit monitoring service and don’t actually offer free credit scores at all.
“The problem is this deceptive ad strikes at the heart of Americans’ personal financial health. A person starts off doing the responsible thing and trying to check their credit score, but the next thing they know, their credit card is being charged,” Udall continued. “In these tough economic times, we need to do all we can to block such dishonest advertisements and help empower consumers to avoid these financial traps – and the CFPB is the best way to accomplish these important goals.”
Udall has fought to arm American consumers with their free credit scores so that they can make better-informed financial decisions, introducing the bill and pushing to get it included in the Dodd-Frank Wall Street reform bill last year. After the CFPB was created through the reform bill, Udall urged then-special adviser to the President Elizabeth Warren to make it a priority for the new agency to give consumers free access to their credit scores. Most recently, Udall advocated for Cordray’s confirmation in order to fulfill CFPB’s enforcement authority over deceptive business practices such as those employed by predatory credit rating agencies.
Following is the text of Udall’s speech as prepared for delivery:
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Madam President, I come to the floor to speak in favor of Richard Cordray’s nomination to lead the Consumer Financial Protection Bureau, otherwise known as the CFPB. Nearly two months ago I urged our Senate leaders to prioritize a vote on the nominee, because without a Director of the CFPB there is important consumer protection work being left undone … work that would benefit hardworking Coloradans and families all across the nation. So, to begin my remarks, I want to thank both the Majority and Minority leaders for moving to this important nomination.
Now, I want to speak directly to Coloradans and any other Americans who may be listening today. Sometimes senators get up here and talk about this agency or that agency – and it all sounds like alphabet soup. But this is not just another alphabet agency. The CFPB may be one of the most important federal agencies we have, and it should be allowed to fully open its doors and protect consumers.
The CFPB was created in the Wall Street Reform and Consumer Protection Act to protect American consumers from predatory and unfair financial practices. It was chartered to prevent the same kind of abuses that banks and other large financial firms engaged in as they drove the economy into the ditch just a few short years ago. When we look back at the financial collapse of 2008, many of us still can’t believe that the largest banks and financial firms were able to put our economy at such risk. As drastic measures had to be taken – and billions of dollars invested in these firms – it certainly didn’t seem fair that banks should get taxpayer help after having taken advantage of the good intentions of American consumers and tanking our economy. But the truth is we were forced to act, or else even worse economic troubles awaited – potentially a worldwide financial depression. That was why the Congress created the CFPB. To ensure that kind of abuse never happens again. And when we passed the Wall Street Reform legislation, Congress made clear its intent to create a watchdog with the responsibility to make the financial marketplace safe for consumers.
That’s something we should all want. To ensure that Americans aren’t being taken advantage of by big businesses and Wall Street bankers. To ensure that someone is looking out for the little guy. To ensure that there is just slightly more of a level playing field for the Americans who play by the rules.
Unfortunately, it’s not. Many of our colleagues are raising a host of issues related to one central argument: that the CFPB will not be accountable to Congress … and that it will go hog wild in its efforts to look out for hardworking Americans.
Yes, Madam President, that’s right….they argue that the CFPB will have too much power to protect consumers. I know that seems strange to hear – especially after the banking sector abuses nearly sent our economy down an irrecoverable path … and millions of Americans saw many of their investments and much of their net worth disappear almost overnight. But, yes, some of my colleagues actually want to weaken the consumer protections that were included in the Wall Street Reform bill – which by the way is the law of the land. And in order to make sure that happens they have vowed to block – to filibuster – all nominees to head the CFPB, regardless of who they are. There have been blanket statements made on the front end of this effort that whoever the nominee is, that person will be blocked.
They think that by denying the CFPB a Director, they can erode the Bureau’s effectiveness and make it easier for banks to operate without limitation.
That is precisely why we have to overcome the filibuster that’s being waged against Mr. Cordray right now. Without his leadership and a strong CFPB to look out after the interests of consumers, we are putting the financial security of hardworking American families at risk — and the country’s economic recovery at risk. By failing to give the CFPB a confirmed Director, we’re actually reducing oversight of predatory lending and deceptive banking practices … these are practices that in no way help our economy.
I don’t think I’m stretching the facts to say this: Deceptive financial practices continue to threaten Americans every day, and we must do more to ensure these abuses are brought to an end.
Let me focus on one particular area. Credit reporting agencies continue their deceptive ads on websites with misleading names, such as www.freescore.com and www.freecreditscore.com, that lure people into a costly credit monitoring service and they DO NOT offer free credit scores at all. Instead what they do is they take your credit card number and begin charging you a monthly fee.
It’s a similar hustle that many other ‘too good to be true’ websites offer. The problem is this deceptive ad strikes at the heart of Americans’ personal financial health. A person starts off doing the responsible thing and trying to check their credit score, but the next thing they know…their credit card is being charged.
Without a confirmed director, the CFPB has diminished power to investigate the actions of the major credit reporting agencies and pull down these deceptive ads. That doesn’t make any type of common sense. It’s the sort of thing that has Coloradans asking me – when are you guys in Washington, D.C. going to side with us and stop always looking out for the big banks?
In these tough economic times, we need to do all we can to block such dishonest advertisements and help empower consumers to avoid these financial traps – and the CFPB is the best way to accomplish these important goals.
But it needs a Director for it to act.
As you may know, the Wall Street Reform bill contained a bipartisan provision I authored that now requires lenders and other creditors to actually provide consumers a free credit score when their score is used to deny them credit or they are offered credit on less than favorable terms.
I authored this provision because credit scores are the most important and influential measure of a consumer’s creditworthiness. As millions of Americans continue to repair their credit status in the wake of the nation’s worst financial collapse since the Great Depression, it’s my belief that the CFPB must fully implement its congressionally appointed oversight of consumer credit scores and related products to stop deceptive advertisements and other set-ups.
I’ll say it again: In order to carry out this mission, the Senate must confirm a Director to head the Bureau. The Consumer’s Union – one of the leading consumer advocates in the U.S. – is urging Congress to confirm Mr. Cordray so the CFPB can tackle other critical consumer protections: • Reducing the penalty fees and punitive interest rates banks can charge, • Requiring the credit rating agencies to maintain accurate consumer credit files and investigate and fix errors reported by consumers, • And finally the CFPB could police the mortgage market to stop scams against consumers and prevent the return of the toxic loans and dangerous lending practices that led to the foreclosure crisis and the recession.
I don’t think I’m overstating it to say there is still a slew of unsafe financial products and services in the marketplace that can trap them in high interest debt, which then threatens our larger economic health more broadly. The CFPB should be given the ability to tackle these abusive and deceptive practices and be on the lookout for the next breed of financial scams.
For these reasons, Madam President, it’s my hope that the Senate will take action quickly to confirm Mr. Cordray’s nomination … and put in place an effective consumer financial watchdog to ensure Americans get the tools they need to take control of their own financial destinies.