Washington, D.C. – U.S. Senators Jack Reed and Senator Sheldon Whitehouse joined a group of 40 Senators in standing up for the Consumer Financial Protection Bureau’s (CFPB) independence and power to obtain justice for consumers who have been wronged by large financial institutions.
In a letter to Senate leaders Mitch McConnell and Chuck Schumer, the Senators urged the leaders to reject any government funding deals that would subject the CFPB’s funding to political interference. The independence of the CFPB’s structure and funding stream has been key to its success, which in just six years has returned nearly $12 billion to more than 29 million cheated consumers.
“The administration has already undermined the effectiveness of the CFPB by appointing Office of Management and Budget Director Mick Mulvaney as part-time Director of the Bureau,” the Senators wrote. “Altering the funding stream of the Consumer Financial Protection Bureau would further jeopardize the agency and its ability to conduct independent investigations into financial wrongdoing. The Dodd-Frank Wall Street Reform and Consumer Protection Act established the CFPB as an independent agency to protect it from political interference by Congress or the Executive Branch. … The CFPB has done its job well and there is no basis for dramatically altering its funding source and undermining its ability to protect consumers.”
In addition to Reed and Whitehouse, the letter was signed by Sens. Jeff Merkley (D-OR), Sherrod Brown (D-OH), Elizabeth Warren (D-MA), Catherine Cortez Masto (D-NV), Bernie Sanders (I-VT), Kirsten Gillibrand (D-NY), Edward J, Markey (D-MA), Mazie K. Hirono (D-HI), Bob Menendez (D-NJ), Maggie Hassan (D-NH), Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Debbie Stabenow (D-MI), Cory Booker (D-NJ), Chris Van Hollen (D-MD), Tim Kaine (D-VA), Bob Casey (D-PA), Gary Peters (D-MI), Tammy Duckworth (D-IL), Ben Cardin (D-MD), Maria Cantwell (D-WA), Dianne Feinstein (D-CA), Bill Nelson (D-FL), Mark Warner (D-VA), Ron Wyden (D-OR), Michael Bennet (D-CO), Brian Schatz (D-HI), Patty Murray (D-WA), Kamala Harris (D-CA), Tom Udall (D-NM), Martin Heinrich (D-NM), Joe Donnelly (D-IN), and Amy Klobuchar (D-MN).
Reed and Whitehouse have also urged President Trump to swiftly nominate a permanent director of the CFPB who will put working families ahead of Wall Street interests.
The full text of the letter is below.
January 17, 2018
The Honorable Mitch McConnell The Honorable Charles Schumer
Senate Majority Leader Senate Minority Leader
Room S-230, U.S. Capitol Room, S-221, U.S. Capitol
Washington, D.C. 20510 Washington, D.C. 20510
Dear Majority Leader McConnell and Minority Leader Schumer,
As Congress works to finalize the Fiscal Year 2018 Appropriations bill, we respectfully request that you reject any language that alters the funding stream of the Consumer Financial Protection Bureau (CFPB). Independent funding for the CFPB is critical for the agency to continue vigorously enforcing consumer protection laws without any political interference. We write to highlight the importance of excluding any such language because the recommendation and explanatory statement for the FY2018 Financial Services and General Government Appropriations bill regrettably included language to do just that.
The administration has already undermined the effectiveness of the CFPB by appointing Office of Management and Budget Director Mick Mulvaney as part-time Director of the Bureau. Altering the funding stream of the Consumer Financial Protection Bureau would further jeopardize the agency and its ability to conduct independent investigations into financial wrongdoing. The Dodd-Frank Wall Street Reform and Consumer Protection Act established the CFPB as an independent agency to protect it from political interference by Congress or the Executive Branch. To ensure its independence, the CFPB receives its funding from the Federal Reserve, rather than from the Congressional appropriations process.
The CFPB was designed with an independent Director and an independent funding stream and has successfully advocated on behalf of hardworking Americans. The CFPB’s funding should not be treated any differently from the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the National Credit Union Administration (NCUA), or the Federal Reserve. Subjecting any banking regulator, including the CFPB, to the appropriations process would jeopardize the ability of that agency to fulfill its mission and hold bad actors accountable.
The CFPB has done its job well and there is no basis for dramatically altering its funding source and undermining its ability to protect consumers. In just six years, the CFPB has returned $11.9 billion to over 29 million cheated American consumers. From when it opened its doors in 2011 through 2016, the CFPB brought a total 164 enforcement cases. Comparatively, during the height of predatory lending crisis from 2000 to 2008, the five federal financial regulators, including the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the now defunct Office of Thrift Supervision (OTS), the Federal Reserve Board, and the Federal Trade Commission (FTC), brought a total of only 79 consumer enforcement actions – despite the rampant consumer abuses and frauds that occurred in the build up to the 2008 financial crisis.
The CFPB has fought against Wall Street abuses, including its record-breaking settlement in the Wells Fargo fake-accounts matter. The agency worked alongside the Office of City Attorney for Los Angeles and the OCC to uncover the bank’s illegal practices that led to millions of Americans having accounts opened in their names without their knowledge. Most recently, the CFPB returned more than $100 million to consumers in response to the credit repair company Morgan Drexen charging illegal fees.
We appreciate your consideration of our request to preserve the independent funding stream of the CFPB and look forward to working with you on this important matter for all American consumers.
Sincerely,
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