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New "Cop" on the Beat for IL Consumers

July 22, 2011

CHICAGO - The Consumer Financial Protection Bureau (CFPB) has just opened for business with the goal of protecting consumers in Illinois and around the nation from deceptive practices in such financial dealings as mortgages, payday loans, and credit card lending.

Brian Imus, state director of the Illinois Public Interest Research Group (PIRG), says there's already a problem, however. More than 40 Senate Republicans have vowed to block the nomination of any director unless the agency is weakened. Imus explains this battle has been going on since Congress began trying to reform Wall Street two years ago.

"Wall Street banks are doing everything they can to weaken Wall Street reform. Fortunately for consumers, now we have a new 'police department' that protects consumers. Now, we just need a tough sheriff who can run it."

Many consumer groups had expected that "new sheriff" would be Elizabeth Warren, the Harvard professor whose outspoken advocacy helped to create the agency. She encountered such fierce opposition that President Obama nominated former Ohio Attorney General Richard Cordray as director. He is now also being opposed.

Imus says Congress needs to confirm the CFPB director nomination quickly – because without a director, the agency is not able to fully enforce consumer protections.

"Right now, for example – today, it has the power to regulate certain banks depending on their size. Until a director is confirmed, it won't be able to fully regulate all banks."

Banking interests fear the agency will create burdensome rules that stifle business. Imus says protecting consumers should be part of that business. Eventually though, he sees this new "cop on the street" as good for everyone.

"This is going to be good for Illinois consumers, folks that have been dealing with foreclosures. A lot of those were caused because of the failure of past regulators to deal with the subprime market."

The CFPB was created by the Dodd-Frank Act, to streamline consumer financial protection into one federal agency. It was signed into law last July, and the agency opened for business less than a week ago.

Mary Anne Meyers, Public News Service - IL