A coalition of more than 200 business, religious, and social groups around the country want to save the Consumer Financial Protection Bureau, the federally funded agency that protects homeowners from financial abuse.
The CFPB was set up by the 2010 financial reform law, Dodd-Frank, which the Trump administration plans to scale back. The coalition sent a letter to President Trump this week, pleading with him not to cut its funding.
The Consumer Financial Protection Bureau was set up in 2011. Since then, it's provided nearly $12 billion in financial relief to 29 million people, who have been the victims of financial wrongdoing.
“If you might need to refinance, if you might need a home improvement loan, and you don’t want to get ripped off, the only way you are going to do that is through the Consumer Financial Protection Bureau,” says Ruhi Maker, a senior staff attorney with the Empire Justice Center in New York.
Maker was also on the Federal Reserve’s Consumer Advisory Committee back in 2008 when the housing market crashed.
“Many of the loans that were being made were essentially unaffordable loans and were loans that were set up to fail.”
Maker says the bureau holds banks and financial lenders accountable and forces them not to overcharge their clients.
“It kind of makes the other banks say, ‘Hey, there is a cop on the beat. I better make sure I am not violating the law.’”
Loraine Martinez, a foreclosure prevention staff attorney with Connecticut Fair Housing Center, says that without the Bureau, millions of consumers could be scammed by unfair financial services, “because they don’t have the money to litigate against these large companies.”
Martinez says the Bureau receives complaints from consumers, and those complaints are what lead to federal investigations. But that could all change if Trump defunds the Bureau.
“But it just doesn’t add up that the administration would run on caring about people who have been forgotten and then gets rid of the only financial regulator that has their ear to the ground about what’s going on with all financial products.”
Martinez says she’s concerned that banks will start offering unaffordable loans again and push the region back into a foreclosure crisis.