When it first debuted a little over a year ago, it remained to be seen whether the government's Consumer Financial Protection Bureau would be a positive force in the lives of consumers or if it would be just another bureaucracy added to the process of getting justice for those who have been wronged. Statistics recently released by the CFPB show that it falls overwhelmingly in the first category, with 4 out of 5 consumers who turned to the agency reporting that their problems were settled to their satisfaction.
Take the example of "Ronald," one of six Americans whose cases the Bureau released a summary of in conjunction with its database statistics. A 77-year-old veteran, Ronald received a notice saying that he still owed a significant amount on his mortgage despite his thinking that he had already paid it off. The CFPB investigated and found that his mortgage had been paid off in 2007; the bank sent him a check for $30,000 as a refund for overpayment plus interest. A similar story occurred with "Nelda," a 67-year-old data clerk who received $2000 worth of fraudulent charges on her credit card that the card issuer refused to write off as fraud. The CFPB got involved and made the company remove the fraudulent charges and call off the debt collector that had taken Nelda to court.
Of course, not everyone is happy with how well the CFPB is working.
State National Bank of Big Spring, Texas and a few free market advocacy groups have filed a lawsuit against the agency and the legislation that created it. The lawsuit claims that the agency has too much regulatory power, doesn't receive sufficient oversight from the government and that the appointment of the current director by President Obama was unconstitutional. According to Jim R. Purcell and C. Boyden Gray, two of the individuals behind the lawsuit, the supposed constitutional violations of the Consumer Financial Protection Bureau and the Financial Stability Oversight Council that oversees it "pose a direct threat to economic recovery." Really?
Given the source of the lawsuit, however, I can't help but wonder whether the CFPB poses a bigger threat to unjust banking practices than it does to economic recovery. If anything it seems to me that the creation of the CFPB offers a positive step toward recovery since it's helping consumers to keep the money and property that is rightfully theirs instead of having it ripped away from them through unlawful foreclosures and predatory practices.
We'll have to wait and see if any major revelations or changes occur as a result of the lawsuit, though it's interesting to note that the arguments included in it have been brought up in the past and were dismissed --before the bureau was created. Why such opposition for a consumer protection bureau whose sole designation is to act as a consumer's watchdog?
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Nothing good ever comes of government regulation. Ever. You cited the banks as the cause of the poor economy. what did the banks do? They made bad loans. why did the banks make bad loans? The government told them to. As a mortgage loan officer I can tell you that in the early nineties the bank I was employed by was subject to a poor CRA audit. CRA is the Community Reinvestment Act and was designed by the GOVERNMENT to force banks to make loans specifically to underserved borrowers in low income areas. There is a reason people live in low income areas. Low income! The penalties for non compliance with the CRA are serious and therefore we were instructed to go into the low income areas and do whatever it takes to increase our business in those areas. We were making horrible loans and getting them approved by noting "CRA" at the top of the first page of the package. Our next CRA audit was satisfactory, but out of dozens of these loans that I personally originated, I only know of one that did not result in a foreclosure. The homes were without exception in worse condition when we got them back than when we made the loans. We lost big time and what happened to the customers? They lived in a home for free for a while and then went back to renting. Who is the real victim here? The bank and the banks paying customers who ultimately end up paying the price. The result? More regulation. If you were serious obout advocating for the consumer you would be for less government interference, not more. The free market always results in the most equitible distribution resouorces. The result of the CFPB will be less opportunity for the public to own homes, start businesses, and achieve the American Dream.
Wayne --Thanks for commenting and sharing your viewpoint. I am not for big government and big regulations --I know there are varying points of view. To me --it's about right and wrong not left and right. I've said this all before --but it's worth repeating;
The truth is, I am not against banks --only abusive and fraudulent banking practices. Perhaps these financial crimes--yes, that's what they are, crimes--continue to happen because we never addressed the real problems to begin with. You can't fix a problem you don't acknowledge. Perhaps these financial crimes--yes, that's what they are, crimes--continue to happen because we never addressed the real problems to begin with. You can't fix a problem you don't acknowledge.
What about those innocent homeowners who unlawfully lost their homes due to fraud?
Why not talk about the corruption and collusion that brought such damage to innocent borrowers and to the entire economy? I've read dozens of woefully painful homeowner stories of abuse that continue to solidly demonstrate most have asked all the right questions, did all that could be expected of them and were given nothing but the runarounds, ruined credit and broken promises. All the while, behind the borrowers' backs, the mortgage companies and their hired foreclosure mills were busily creating fabricated documents to help speed up the foreclosure process all while lobbying for new legislation creating more non-judicial states, where they could bypass the courts.
As I've said before, last I knew, knowingly signing documents fraudulently and using them in a court of law is frowned on, right? It's criminal, isn't it? Or is it only criminal if you are a homeowner and not a bank? Seems we've gone to great lengths to create and then accept a double standard here.
The more banks point fingers of blame at the borrowers, the deeper the problem grows. The focus and blame for every financial crises, continues to be levied at American families who in the end only want justice and accountability. Unfortunately, instead, consumers continue to get blamed or ignored. Many in the financial industry continue to look for excuses --rather than finding solutions. In 2009, I believed a strong consumer protection bureau was a step in the right direction --http://weblogs.sun-sentinel.com/news/opinion/theslant/blog/2009/08/_stories_continue_to_pour.html --I continue to believe the same today.
This doesn't mean I am against the free market, nor does it mean I am against all banks --I am simply against corporate wrongs --and those people who could right them --but refuse to do so ---or even admit there is a problem needing a solution.
My issue is far too long to detail as it has spanned the course of 1.5 years. Why don't we all join a class action lawsuit. Any attorneys out there that would be willing to help all of Nationstars victims?
People who advocate for the poor banks and servicers, are a bunch of bullies. Yes you gave us loans we could not possibly keep up for long, but you also didn't throw in the mix that MERS had helped to foreclose on homes you don't own either, but collected on fraudulent claims that the homeowners were to blame. I am witness as I am a victim and fighting on my own for three years to prove that there was fraud and predatory lending. I didn't even have more then a $300 SSI payment that GMAC knew about and used the income of my wife's SSI/SSD and my daughters SSI as income and did not put them on the deed. Now who's fault was that when I complained to the mortgage broker that I couldn't afford the payments and he just said I'm sure you can handle them. Now Nationstar is foreclosing on this home for non payment to them when I was paying GMAC, but they left that out of the deeds office and the MERS data base who claimed they own the mortgage and note, even when there is a broken chain in the mortgage MERS can just jump in and take homes that don't belong to them. Nationstar even acted as secretary of MERS and assignee for Nationstar, assignment with an expired Notary. how does a servicer even get this far before a court and have a judge even tell me he didn't know what MERS is and listen to Nationstar's lawyer that we are just dead beats and that MERS is the legal owner of the mortgage when they didn't file for assignment until I started a Quiet Title on them. What is wrong with this country when a court takes the words of a lawyer who is standing in for a servicer while proving fraud to the court and they ignored it. I am so discusted when I think of all the scams I could have run on people but didn't because I am an honest man who is disabled and know how people can suffer at the hand of TBTF Banks.
The main problem for consumers and loan service fraud or even poor loan servicing is the amount of time and effort it takes to fight even simple issues. More and more loan service companies are appearing and in order to battle their mistakes, fraud or omissions you must be very detailed in your approach. If consumers do not take that into account, it's very difficult to correct errors or even prove fraud. I hear that all the time, "class action" or lawsuit but if you don't have all the evidence, detailed and organized, your chances of "winning" becomes a distant dream. When you speak with anyone on the phone, stay calm, and be calculating, avoid yelling or getting impatient. You must be very methodical and firm in your approach. Every thing you do must be typed up and documented. All mail must be certified and signed for with return receipt. Take screen shots of everything you do online. Get to know how to file a BBB, write a RESPA letter and file with the FTC and CFPB and Attorney General. This takes a lot of time and effort...a lot of time and effort on the consumers part. You have to build your own case. I have 7 pages of apology letters from my last loan servicer, I was able to battle them on every single error they made. Sadly, so many people are experiencing this, so many. I really do believe there has to be a NATIONAL movement and protest in Washington D.C. on this issue. The Government has initiated many departments and programs which now help the consumer but it's not enough. I really believe there has to be a large scale movement on this subject to more attention to it