New CFPB Rule on Forced Arbitration and an Anticipated Rule on Payday Loans has Opposition Misfiring on all Cylinders
WASHINGTON, D.C. – In recent days, financial industry groups, a Republican campaign committee, and Wall Street-backed congressional leaders have escalated their all-out war on the Consumer Financial Protection Bureau (CFPB) and its director, Richard Cordray, with a flurry of conveniently interrelated actions occurring within days of each other.
“The CFPB has been an effective champion for consumers, and that has made Director Cordray a target of corporate special interests that want nothing more than to destroy the Consumer Bureau so it can no longer crack down on the industry’s deceptive and predatory practices,” said Karl Frisch, executive director of Allied Progress.
He continued, “We saw the financial industry step up its attacks on Director Cordray following the passage of the consumer-championed arbitration rule. These special interests know there is more to come on overdraft protection and payday lending, and that is why they will stop at nothing to undermine the integrity of Director Cordray and the Bureau he represents.”
The suspiciously timed and incredibly similar attacks against Cordray and the CFPB include:
- Jeb Hensarling (R-TX) launched a political attack on Cordray, accusing him of violating the Hatch Act and calling for an investigation. Hensarling has been “passive-aggressively chiding” Cordray for months about political issues unrelated to his consumer advocacy work. [Housing Wire, 8/1/17]
- Republican campaign committee filed a politically motivated Freedom of Information Act request related to Hensarling’s baseless Hatch Act attack. The Republican Governors Association submitted a completely speculative, politically motivated FOIA to soil Cordray’s reputation. [RGA News, 8/1/17]
- Shady pro-Industry astroturf group launches new attack ad against Cordray lining up with Hensarling and Republican campaign committee messaging. Like ads released by the group in the past, the latest is riddled with misinformation. Hardly a surprise coming from an entity run by a man whose previous gig was working for a “clean coal” group that was caught sending forged letters to Congress in an effort to influence lawmakers. [Allied Progress, 8/1/17]
- Powerful payday industry trade group complains that Cordray and CFPB have shut industry out of the process, but the trade group’s board chair serves on an important CFPB advisory committee. Dennis Shaul, CEO of the payday lending industry’s special interest trade group Community Financial Services Association (CFSA), said in an Aug. 1 letter that the CFPB has not allowed for industry input on rulemaking. [Dennis Shaul Letter, 8/1/17] Yet a FOIA by Allied Progress last year showed proof of a strong working relationship between CFPB officials and representatives of industries and groups that traditionally oppose the CFPB’s rulemaking efforts, proving the CFPB has working relationship with stakeholders of varying opinions. CFSA’s board chairman, Patrick O’Shaughnessy even serves on an important CFPB advisory committee. [Allied Progress, 5/10/16; CFSA Board of Directors, accessed 8/7/17; Payday Lending Facts, accessed 8/7/17.]
- Same powerful payday industry trade group claims the CFPB Is ignoring consumers. Unfortunately for the trade group, an absurdly large number of the consumers in question used the exact same language or shared suspiciously similar personal circumstances when submitting public comments, drawing into question the authenticity of their pro-industry claims. The industry asserted that the CFPB was improperly categorizing public comments when Allied Progress revealed these so-called “personal stories” appeared to be form letters – using many of the exact same sentences and paragraphs, word for word. [Allied Progress, 4/18/17]
- Now Rep. Jeb Hensarling says he might pursue contempt of Congress charges against Cordray. This is the same Hensarling who has accepted $4,698,821 from banks and other financial industries regulated by the CFPB. Hensarling is asserting his committee has the authority to institute contempt of Congress proceedings against Director Cordray in response to the Bureau’s process for issuing a final rule cracking down on forced arbitration, the same issue that has industry groups, a Republican campaign committee, and pro-industry members of Congress simultaneously springing to action against Cordray. House Financial Services Ranking Member Maxine Waters (D-CA) calls the contempt charges “baseless.” [OpenSecrets, accessed 8/7/17; Reuters, 8/4/17]
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Allied Progress uses hard-hitting research and creative campaigns to stand up to Wall Street and powerful special interests and hold their allies in Congress and the White House accountable.