Consumers savaged by the COVID-19 pandemic will have a familiar face in their fight to handle their consumer debt issues. In addition to more consumer friendly legislation, a CFPB restored under Biden will turn the tables on predatory lenders and collection agencies.
The Consumer Financial Protection Bureau, or CFPB, was created after the 2009 financial crisis to be the FTC’s enforcer. It makes sure people don’t get taken advantage of by lenders, debt collectors or other companies. The CFPB has returned over 10 billion dollars to consumers harmed by predatory lending.
A CFPB Restored Under Biden Means Relief for Consumers
With the election of Trump in 2016, the future of the CFPB was in doubt. Trump appointed Mick Mulvaney as Director. Mulvaney is a harsh critic and was in charge with gutting the agency. It worked in the short term. Cases dropped. Consumers received less relief. In his haste to destroy everything Obama ever created, Trump made a tactical error. The administration filed a lawsuit asserting the President could fire the CFPB director at any time. Previously, this was not the case. This lawsuit was confirmed by the Supreme Court, therefore setting the precedent that Biden as President can put remove the current Director and replace him with someone who fits better with Biden’s ideology. Had Trump not done this, Biden would have been stuck with whomever Trump decided.
Build Back Better – CFPB Style!
On Day 1, President Biden will be able to appoint someone who is more in line with the original mission and intent of the agency. This means restoration of payday loan watchdog groups and added protection for lower income communities. The average consumer will have more protection than anytime over the past 4 years.
Here are some reasons for optimism:
- Well thought out regulations with encourage lending and not prevent it.
- Consumer cases against collection agencies will have more teeth.
- Large cases against states and lenders will resume.
As with any change in an administration, it may take a little time for these changes to be enacted. Trump dismantled many institutions, old and new. A brighter future for the CFPB exists now that the country has a President-elect Biden!
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