America's newest federal agency just turned 3 years old, and it continues to be the preferred punching bag for everyone from the American Bankers Association to politicians like Rep. Spencer Bachus (R-Ala.), who once famously and proudly proclaimed that, "Washington and the regulators are there to serve the banks." The CFPB, on the other hand, sees itself as a playing-field leveler. Consider its latest offering: a public narrative-focused Consumer Complaint Database where anyone can tell their story about being swindled, duped or otherwise unfairly treated by any entity that falls under the purview of the agency.
All those who said the CFPB would lead to the end of the financial world should be happy to learn that sky has not fallen. Despite the steep fines levied by the bureau, financial institutions continue to grow and grow, and the economy as a whole continues to improve, albeit too slowly.
That said, the CFPB has faced more than a few challenges over the past three years. The U.S. Chamber of Commerce, thundering hordes of financial services lobbyists and a host of conservative groups that vowed to crush Dodd-Frank along with its prescription for establishment of the CFPB, poured more than $1.3 billion into the effort.
On a crusade to eviscerate the agency from the start, Senate Republicans blocked the nomination of Elizabeth Warren as its first director even though, or, perhaps more accurately, because it was her brainchild.
Ironically, Congressional opposition became a proof of that old adage, "Be careful what you wish for." While the GOP succeeded in blocking Professor Warren from the directorship of the CFPB, the agency's current director, Richard Cordray, now enjoys the strongest ally he could possibly hope for on the Senate Banking, Housing and Urban Affairs Committee. Professor Warren is now Senator Warren.
Of course, the CFPB continues to fend off bills -- now numbering in the double digits -- aimed at defunding, defanging or outright destroying the agency, including the House's attempt to gut the CFPB and limit the director's purview through the so-called Consumer Financial Protection and Soundness Improvement Act.
Despite vehement opposition, the CFPB continues to build on a solid track record that to date includes winning $4.6 billion in damages for 15 million consumers harmed by illegal practices. Included in that figure are major accomplishments, like forcing credit card companies to return $1.5 billion to consumers duped by add-on products and changing lending rules to ensure loans can and will be paid back so there will never again be a repeat of the Great Meltdown of 2008. The agency has also started the arduous process of taking entities that offer predatory student loans to the mat in court.
And while the CFPB has already handled more than 400,000 consumer complaints, recent announcements indicate the agency is moving to the next level in its enforcement, oversight, education and advocacy efforts.
Since its inception, the CFPB has covered mortgages, bank accounts and services, private student loans, auto and other consumer loans, credit reporting, debt collection, payday loans, and money transfers. On July 21, it announced the addition of other areas tasked to it by Dodd-Frank, namely prepaid card, debt settlement and credit repair companies as well as pawn shops and title loan companies.
Finally, Director Cordray recently announced that the CFPB will expand the agency's public-facing Consumer Complaint Database to feature full stories from consumers about their negative experiences with the companies the bureau oversees. Before this upgrade, the disclosures had been limited to the name of the company, type of product, date of submission, ZIP code associated with the complaint and what the response was. Its usefulness to consumers was limited. Now, consumers will have a better platform to get their stories out there.
In a CFPB blog post, Director Cordray said, "The consumer experience shared in the narrative is the heart and soul of the complaint. By publicly voicing their complaint, consumers can stand up for themselves and others who have experienced the same problem. There is power in their stories, and that power can be put in service to strengthen the foundation for consumers, responsible providers, and our economy as a whole."
Needless to say, the news was greeted with mixed reactions.
Elizabeth Warren's brainchild has become people-powered, just like the campaign that propelled her into the U.S. Senate. The narrative complaint database creates a major cog in the endlessly complex machinery of a regulatory agency that revolves around the very interests of the people it serves. It is a fitting milestone for an organization that has accomplished a great deal over the past three years, but whose biggest achievements are yet to come.