May 27, 2011
Washington, DC - The National Consumers League (NCL), the nation’s pioneering consumer organization, today announced its intention to support the appointment of Professor Elizabeth Warren as director of the Consumer Financial Protection Bureau (CFPB).
“The long-term viability of the CFPB is essential in order to protect consumers from those who would engage in predatory behavior in the financial services industry,” said Sally Greenberg, Executive Director of the League.
“NCL calls on lawmakers to reject several recent proposals to weaken the agency’s ability to protect consumers and to support the appointment of a strong director to lead the agency,” said Greenberg.
NCL supports the appointment of a strong consumer advocate to direct the CFPB. There is no more capable individual to lead the bureau than its current head, Elizabeth Warren. Professor Warren is a long-time consumer champion and the CFPB itself is her brainchild. Her permanent appointment and confirmation by the Senate is long overdue.
The League also believes that the Dodd-Frank Act provides for sufficient oversight of the agency. Under the Act, the Financial Stability Oversight Council (FSOC) can veto any decision made by the CFPB with a two-thirds majority vote. If H.R. 1315 becomes law, the same regulatory body that was so lax in overseeing the loan and credit card practices of banks that contributed to the 2008 financial crisis will be able to override the CFPB with a simple majority. Giving the FSOC more power over the CFPB would place power in the hands of those who have a poor track record of preventing financial crises.
Finally, NCL believes the CFPB needs a single director to act effectively. H.R. 1121 seeks to replace the director of the CFPB with a board of five commissioners. Such a politicized leadership structure is unnecessary given the many statutory restrictions on the CFPB’s power.
Professor Elizabeth Warren and a strong CFPB are very much needed to protect consumers from the predatory practices of certain industry actors that brought the nation’s economy to the brink of ruin. Professor Warren has stated time and again her belief that regulation is best used when there is no better alternative. Existing oversight authority is more than adequate to prevent the CFPB from abusing its mandate. Just as importantly, the ability of the agency to protect consumers in a robust manner without undue political interference must be preserved.
About the National Consumers League
The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.