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Former CFPB Director Rich Cordray offers insights on consumer protection, government response to COVID-19
In online discussion hosted by U.S. PIRG, Cordray advises how to navigate financial problems caused by the economic downturn
WASHINGTON — Former Consumer Financial Protection Bureau (CFPB) Director Rich Cordray today called for state and federal legislative action to protect consumers from difficult times that he expects will last longer than most believe. During an online discussion hosted by the U.S. Public Interest Research Group, Cordray laid out urgent consumer protection priorities for Congress and the Trump administration, while offering advice to consumers struggling at this difficult time.
“Making sure we have broadscale housing relief on mortgages and relief from being evicted for nonpayment of rent is the most important thing right now,” Cordray said during the livestreamed panel. “Right now, to fight this pandemic, one of the things that is being ordered for many households across the country in most states is stay at home orders ...How can you do that if you're aren't able to stay in your house?”
Cordray led the CFPB from its creation in 2011 until 2017. During his tenure, the bureau recovered $12 billion for some 31 million consumers who were victimized by financial schemes and scams by big banks, payday lenders, debt collectors, for-profit colleges and credit bureaus. Cordray recently published a white paper critiquing the failures of the CFPB’s new leadership to hold bad actors accountable, particularly in the face of the economic crisis resulting from COVID-19. He is also the author of a new book, “Watchdog: How Protecting Consumers Can Save Our Families, Our Economy, and Our Democracy.”
During the event, which was hosted by U.S. PIRG President Faye Park and also featured U.S. PIRG’s Senior Director for Federal Consumer Programs Ed Mierzwinski, Cordray offered suggestions for how consumers can help the CFPB do its job.
“There are many ways people can help,” he said. “When they have a problem with a financial company, file a complaint. It's very easy to do at consumerfinance.gov. It takes usually less than 15 minutes and helps hold these companies’ feet to the fire and often may lead to some relief in your case.”
As members of Congress and the Trump administration consider another COVID-19 relief package, U.S. PIRG is urging decision makers to focus on addressing the urgent health crisis and meeting the immediate needs of Americans. To do so, policymakers should take the following emergency steps to protect consumers from the economic fallout of the pandemic:
Stop Negative Credit Reporting: For many people, whether or not they can pay their bills or meet all of their financial obligations will be out of their control until after the COVID-19 crisis is over. Credit bureaus should stop all negative credit reporting about consumers until the coronavirus pandemic ends and consumers have made it back onto their feet.
Freeze Student Loan Repayment: Congress needs to relieve the financial pressures of social distancing so that people don’t need to choose between their family’s health and paying the bills. Cancelling student loan payments for the duration of the COVID-19 pandemic will allow Americans to keep food on the table and stay safe.
Provide Payday Loan and Interest Rate Protections: High-cost payday, car-title and installment lenders who promise “fast cash” for consumers and small businesses stand to profit as millions of Americans — many of whom were already living paycheck to paycheck — struggle to make ends meet over the coming months. Congress should cap interest rates on consumer loans at 36 percent APR for the duration of the public health emergency.
Expand Other Financial Protections: For the duration of the pandemic and a reasonable recovery period, Congress should expand protections against foreclosures and evictions to all consumers; prevent garnishment of stimulus checks by banks or debt collectors; restrict utility shutoffs, vehicle repossessions, and garnishments; eliminate overdraft and other penalty fees; and, take other actions necessary to protect consumers from unfair financial practices.
For additional advice on navigating these uncertain times, check out U.S. PIRG Consumer Tips.
U.S. PIRG, the federation of state Public Interest Research Groups, is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. U.S. PIRG is part of The Public Interest Network, which operates and supports organizations committed to a shared vision of a better world and a strategic approach to getting things done.
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