For years, Americans have been calling for help to resolve problems with their banks, lenders, and other financial institutions. Thankfully, there is now someone to answer the phone and field complaints about unfair financial practices: the Ombudsman's Office at the Consumer Financial Protection Bureau (CFPB).
The Dodd-Frank financial reform bill, which I strongly supported, created the CFPB to make financial transactions fairer, most honest, and more open for the American consumer. Its aim is to put an end to the kind of predatory practices that contributed so heavily to the near-collapse of our financial and banking systems. While this alone is a worthy goal, I also felt that consumers and smaller financial institutions deserved to have someone working with them at the new agency to solve problems one-on-one. Accordingly, I wrote and helped pass an amendment to Dodd-Frank to create an Ombudsman at CFPB.
The Ombudsman has a wide range of responsibilities, including offering expert guidance on laws relating to consumer financial products; advising federal, state, and local agencies on actions that may affect consumers; helping consumers who have a legitimate potential or actual claim against a financial institution regarding consumer financial products; identifying federal agency actions that have potential implications for consumers; and providing information to private citizens, civic groups, and other interested parties regarding their rights under Dodd-Frank.
On December 8th, the Ombudsman's Office officially opened its doors under the direction of Acting Ombudsman Wendy Kamenshine. Ms. Kamenshine and her colleagues will begin by taking questions from financial institutions regarding the implementation of regulations under Dodd-Frank -- but the office hopes to start fielding inquiries from the public this spring. For more information on the Ombudsman's Office, please click here. In the meantime, members of the public who have credit card complaints can forward them to the CFPB by clicking here, and those with complaints regarding their mortgages can contact the agency by clicking here.
While I am pleased with the progress being made to establish the Office of the Ombudsman, there is much work left to do to give Americans the full protections of the Consumer Financial Protection Bureau. Even with the holiday shopping season in full swing, Republican 'Grinches' in Congress have sworn to block the confirmation of any CFPB director, no matter how well-qualified, unless President Obama accedes to their demands to water-down the agency.
On December 9th, 45 Senate Republicans thwarted the confirmation of the president's nominee to head the CFPB, former Ohio Attorney General Richard Cordray. They took this action despite the support for Mr. Cordray's appointment by 37 state attorneys general and hundreds of elected officials in Washington and across the country, and overwhelming public support for the mission of the Consumer Financial Protection Bureau. In fact, Senate Republicans declared that they will not allow the appointment of any CFPB director unless drastic changes are made to Dodd-Frank -- a law they did not support in the first place. This is politics, plain and simple.
It's time for my Republican colleagues to stop pretending that the credit bubble and the resulting financial meltdown never happened. It's time for them to stop pretending as if the Dodd Frank Act never became law. It's time for them to renounce their membership in 'the Financial Crisis Never Happened Caucus,' and it's long past time to approve Richard Cordray to lead the Consumer Financial Protection Bureau.
Without a director, the CFPB cannot fully supervise non‐bank financial institutions such as independent payday lenders, non‐bank mortgage lenders, non‐bank mortgage servicers, debt collectors, credit reporting agencies, and private student lenders. And without a director, Americans will not be fully protected from falling prey to many of the harmful practices that contributed to the worst financial crisis since the Great Depression.
Borrowers who turn to these products can end up paying annual percentage rates as high as 400 percent -- often when they are already struggling with other debt, creating a debt-and-fee-spiral that some customers find extremely difficult to escape.
Yet despite not having a confirmed Director, the CFPB has already demonstrated how it intends to go about its mission, how sorely it was needed, and how effective it can be. Opening the door of the Ombudsman's office is one way it has done so, but it is also already looking out for groups that have been especially hard-hit in the past by unfair and deceptive practices: members of the military, students, homeowners, and seniors. Only in the most polarized political environment could these goals be considered controversial.