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The Consumer Financial Protection Bureau, attacked since before it was born and facing a court challenge to its structure, may be dealt a death blow by the incoming Trump administration.
As an important consumer protection agency and the first domino in a line of regulatory agencies about to be pushed over by the deregulatory army heading to Washington, the CFPB needs to survive for the public good and your investment future.
I'll be showing you how fixing it and not killing it can make regulatory regimes across the United States more effective, less intrusive, and even profitable for you.
Fighting the Good Fight
Sen. Elizabeth Warren (D-MA) has been constantly under attack over the Consumer Financial Protection Bureau ever since she was a law professor at Harvard University calling for the creation of the CFPB. She has continued to receive criticism in her role as special advisor for the CFPB when it was being written into the Dodd-Frank Act, and as the CFPB's biggest cheerleader since her election as a Senator in 2013.
A lot of Republicans and deregulatory zealots have attacked Warren and the CFPB as examples of government overreach.
They're not all wrong. There's a lot about the CFPB that needs to be fixed, in spite of all the good the Bureau has done.
Born out of the financial crisis that imploded banks betting the wrong way on "no-doc" and "liar loans" in subprime mortgage-backed securities and other egregious big bank money-grabbing schemes, the CFPB (part of the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in 2010) set new standards for the mortgage market and establishes necessary consumer safeguards.
The bureau's new rules make it mandatory that lenders verify borrowers' income and their ability to repay loans. Rules now make it harder to push exotic mortgages, including ones with "teaser" interest rates. Regulations are now in place simplifying the disclosures that borrowers receive when they take out a loan.
Last year the CFPB forced Citibank to pony up as much as $700 million in compensation to customers after accusing the giant bank of tricking consumers into buying unwanted credit card "add-ons" like identity-theft protection. In 2014, CFPB extracted a similar amount for similar violations perpetrated by of Bank of America.
The bureau has also gone after student loan servicers for overcharging beleaguered student borrowers, taken down credit card companies for charging undeserved fees, challenged payday lenders on their practices, and looked into lots of corners and dark rooms where consumer-fleecing schemes may be residing.
By the CFPB's own tally, it's generated more than $11.7 billion in "relief" for more than 27 million consumers.
It's even taken on the entire securities industry by proposing a set of rules prohibiting arbitration clauses in brokerage agreements that prevent class-action lawsuits.
In addition to writing new rules, the CFPB also has the authority to enforce those that are already on the books.
About the Author
Shah Gilani is the Event Trading Specialist for Money Map Press. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.