Chuck Bell
Appearances
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Pleasure to be here. Thanks for having me.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Over the years, the Bureau has worked in a broad range of areas to help advance the interests of consumers. One of the initial focuses was on creating better disclosures and warnings for dangerous financial products. So they have done a lot to improve the information consumers get about financial products.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
They have also created a complaints database that's received over 5.6 million complaints from U.S. consumers, so that if you get stuck with something like a credit report error, you can complain to the Bureau and they can reach out to the companies on your behalf and help you get that problem resolved. They also supervise a wide range of financial institutions, including banks,
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
and non-bank financial companies such as mortgage companies, debt collectors, buy now pay later companies, and other fintech companies. We have an increasing number of digital financial products using artificial intelligence and big data and so forth. And so CFPB is trying to make sure that those products are safe for consumers to use and that they don't present an unreasonable risk of fraud.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
They've also brought a lot of court cases to get money back for consumers. One example might be the peer-to-peer payment app called Cash App. The CFPB just recently fined them $175 million, including $120 million in restitution for consumers who had lost money on that platform. So those are some examples of how the Bureau's been working to protect and advance the interests of consumers.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Well, I think when you have an agency that is an active watchdog, it's not always going to be popular with the regulated entities. But I think one of the common criticisms you hear is that the agency is too aggressive and it's overreaching. I think, on the other hand, that if you look at this from the perspective of the customer,
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
We have 250 million customers here in the United States who need financial services. It's a tremendous number of people that are using financial services. And it is also an area where there's many unfortunate, deceptive and unfair practices, such as usurious lending rates, credit reporting errors. all kinds of discrimination, harsh debt collection practices.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
So when the agency puts a stop to some of those practices and creates some guardrails around the financial services economy, many of the companies complain and they're unhappy about it. But I think it's hard to see how the marketplace can really work any other way. We do need to have an active watchdog
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
that looks over how our financial institutions are performing and also goes to bat for consumers when they're being treated unfairly.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
We were already facing some pretty determined industry resistance, even under the Biden administration. For example, the CFPB to protect consumers often makes rules or regulations.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
And one example of that is last March, they finalized a rule called the credit card late fee rule to reset credit card late fees from an average of $32 for the first late payment and $40 for each subsequent late payments to an average of $8. or slightly higher if a bank could justify a higher cost. And the industry, the banks and the U.S.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Chamber of Commerce sued immediately to try to block that rule, and it's been held up with a court injunction ever since. So because under the leadership of Director Rohit Chopra, the Bureau was extremely effective in promulgating new rules to rein in junk fees, and also bringing enforcement cases against banks and financial companies that have wronged consumers.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Right now, there's a determined effort under the Trump administration to try to put the agency completely out of business. And last week, as many people may have heard, there were some people from the Elon Musk's Doge team that entered the CFPB. And at the end of the week, Elon Musk himself tweeted, CFPB rest in peace.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
And we've heard some additional announcements this week that they are indeed doing thinking of shuttering the agency. They put it under the control of the Office of Management and Budget Director, Russell Vogt.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
But we think the activities of the CFPB are broadly popular with the American people, and it's hard to see how we can just leave consumers completely unprotected in the very large financial services economy that we have.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
That's definitely a risk that the current leadership of the CFPB could decide to not defend the lawsuits and the other types of legal actions that the Bureau has made. That would mean that those cases probably do die, like that they will not go forward. Consumers will be unprotected.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
There's another really big case against the payment platform Zelle for fraud losses that have occurred on that platform and the failure of the platform to protect its users. So that would be an example of consumers could lose hundreds of millions of dollars in restitution and relief if the CFPB does not pursue those lawsuits and the cases to defend its regulations.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
I mean, it's really unclear. There are some things that they can slow down through administrative processes. Other things may take an act of Congress, which is probably not out of the question. Also, some of the recent rules that were finalized in the last six months of the agency's operation
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
including the overdraft fee rule and the medical debt credit reporting rule, which halts the reporting of medical debt to credit reports because it's a poor predictor of financial risk for loans and other products. Those can be overturned directly by a majority vote in both chambers of Congress. They have a process called the Congressional Review Act.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
that allows the Congress to invalidate certain rules. So we know that those votes may well be coming, but we will have an opportunity in a democracy for our Congress to vote to keep those rules, which would be wildly popular with consumers, I would say.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
It really means that we might be in a marketplace where people are really on their own. And I think that any government that doesn't try to protect customers on some of these issues is going to have a lot to answer for. So I think the answer is that we would be in an economy that's run by caveat emptor, which means let the buyer beware. And consumers really don't like to operate in an economy.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
We want to have certain safeguards when we're engaging in banking transactions. And we might see a lot of harm happen to people with no consequences or accountability.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
At the current time, the complaint database is still working on the CFPB website.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
So yeah, I think consumers should continue to submit complaints if they're having problems with services. It's a really great tool because it's actually a public database and you can see the patterns of complaints that other consumers have submitted. And the CFPB uses that database to look for indicators of what it should investigate or what types of disciplinary actions might be needed.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Congress definitely has a very large say in what can happen with this. There are certain things that the executive branch would not be able to discontinue without an act of Congress. On the other hand, there's a lot of special interest money that's been flowing into the Congress from financial companies and particularly crypto companies.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
And so this agency was created from the aftermath of the financial crisis. Prior to that crisis, the other federal bank regulators like the Federal Reserve, the FDIC, and the OCC did not do a great job handling consumer complaints.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
And in fact, many of our organizations warned the Federal Reserve about the dangers of predatory mortgage lending that later led to the eight million home foreclosures. I think we're very concerned that there's no way for the financial services economy to operate effectively without massive
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
harm to consumers unless there is a strong CFPB or some other agency that has a mission of protecting customers. So we would hope that the Congress does not precipitously change the rules here and that they hold the administration accountable for any serious cutbacks in the agency's work.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Hey, thank you so much, Ana. It's great to be here with you. And thank you, Ana.