Speaking today at the opening of hearings on the effects of consumer finance regulation, Sen. Richard Shelby (R-Ala.) said the CFPB “remains one of the least accountable agencies in the federal government.”
“As a result, the very consumers the CFPB was designed to help have been harmed by the Bureau, because some of its rules make it more difficult for companies to lend and offer products in the marketplace,” Shelby said.
Shelby said the CFPB’s regulations “may restrict access to credit entirely” for many consumers and businesses – and that the agency is operating “without any meaningful statutory check by Congress.”
“As the Bureau continues to reshape the consumer finance landscape, it is important that these and other issues be fully vetted before Congress and the American public,” Shelby said.
However, Sen. Sherrod Brown (D-Ohio), the committee’s ranking Democrat, defended the agency.
“The CFPB has been a success,” Brown said in his opening statement. “The agency has taken strong actions in a number of consumer finance markets that previously had no federal oversight, including credit reporting, debt collection, payday loans, student loan servicing, and auto finance. The benefits of the CFPB are clear: its actions have resulted in $11.2 billion being returned to over 25 million consumers.”
Brown said the CFPB was necessary in the wake of the financial crisis, when it was “learned that large companies had gambled with the retirement savings and homes of everyday Americans – that millions of people were put into predatory mortgage products they could not afford. As that happened, the regulators were too often looking the other way.”
“It is our duty in Congress to resist collective amnesia and ensure that the same bad practices that led to the crisis are not repeated by a new set of players,” Brown said. “This is why I continue to be troubled by Republican efforts to undermine, and even eliminate, the CFPB.”
On Thursday, CFPB Director Richard Cordray will appear before the committee to deliver a report on the agency's activities.
The chairman of the Senate Banking Committee says that the Consumer Financial Protection Bureau has harmed the very consumers it was founded to help. But the committee’s ranking Democrat defends the agency as vital to consumers’ interests.