A Fighting Chance

we’d set up the agency without a hitch: The Inspectors General of the Treasury and Federal Reserve are required to conduct audits, investigations, and other reviews of department programs and operations. The Dodd–Frank Act charged both these offices with oversight of CFPB implementation. On July 15, 2011, the joint Inspectors General released a report, in which they found that the CFPB had successfully identified mission-critical activities, developed and begun executing appropriate implementation plans, and communicated these plans to key stakeholders. “Review of CFPB Implementation Planning Activities,” Offices of Inspector General, July 15, 2011.

had fraudulently charged their customers: On July 18, 2012, the CFPB ordered Capital One to pay $140 million to two million consumers as well as a $25 million penalty for engaging in deceptive marketing practices with respect to “add-on products” like payment protection and credit monitoring. See “CFPB Probe into Capital One Credit Card Marketing Results in $140 million Consumer Refund,” CFPB blog, July 18, 2012. On September 24, 2012, the CFPB, in conjunction with the FDIC, ordered Discover Bank to pay $200 million to 3.5 million consumers and an additional $14 million penalty for engaging in deceptive marketing practices with respect to extra services like identity theft and wallet protection. Blake Ellis, “Discover to Refund $200 Million to Customers for Deceptive Telemarketing,” CNNMoney, September 24, 2012. On October 1, 2012, the CFPB ordered American Express to pay $85 million to 250,000 consumers as well as a $14.1 million penalty for violating various consumer protection laws, including laws that prohibit discrimination and deceptive advertising practices. See “CFPB Orders American Express to Pay $85 Million Refund to Consumers Harmed by Illegal Credit Card Practices,” CFPB Newsroom, October 1, 2012.

And then on December 23, 2013, CFPB ordered American Express to pay another $59.5 million for unfair billing and deceptive practices. “CFPB Orders American Express to Pay $59.5 Million for Illegal Credit Card Practices,” CFPB Newsroom, December 23, 2012. Enforcement actions have also been used in other areas, including, for example, requiring National City Bank (successor to PNC) to pay $35 million for racial discrimination on mortgage pricing, when they added extra fees for African American and Hispanic borrowers. “CFPB and DOJ Take Action Against National City Bank for Discriminatory Mortgage Pricing,” CFPB Newsroom, December 23, 2013. On November 20, 2013, Cash America was required to refund $14 million and pay an additional $5 million fine, for robo-signing and illegally overcharging servicemembers. “Consumer Financial Protection Bureau Takes Action Against Payday Lender for Robo-Signing,” CFPB Newsroom, November 20, 2013. On December 20, 2013, CFPB required Ally Bank to refund $80 million for racial discrimination in how they marked up car loans and other loans. Patrice Ficklin, “Ally to Repay $80 Million to Consumers It Discriminated Against,” CFPB Newsroom, December 20, 2013. The agency regularly updates its enforcement actions at http://www.consumerfinance.gov/blog/category/enforcement/.

for service members deployed in Afghanistan and Iraq: In her first year and a half at the agency, Holly Petraeus worked actively to help protect servicemembers whose homeownership was threatened by a military move or combat deployment. In addition, her team worked to help servicemembers and veterans who wanted to enroll in college, to ensure they understood the true costs of their degree and what financial aid was available to them. She was also working to help develop a new financial-education curriculum for new recruits that could be delivered by smartphone or computer. And she continues to fight predatory lending that targets servicemembers and veterans. For more, see http://www.consumerfinance.gov/newsroom/written-testimony-of-holly-petraeus-before-the-senate-committee-on-banking-housing-and-urban-affairs/.

turn to the consumer hotline for help: Between July 21, 2011, and June 30, 2013, the CFPB received about 176,700 complaints—36,300 credit card complaints, 85,200 mortgage complaints, 25,700 bank accounts and services complaints, 6,000 private student loan complaints, 5,700 consumer loan complaints, 14,200 credit reporting complaints, and 300 money transfer complaints. “Consumer Response: A Snapshot of Complaints Received,” CFPB, July 2013, 6. Consumers most often contacted CFPB about billing disputes, credit card rates, inability to make mortgage payments, mortgage servicing, bank account management, bank transaction holds and unauthorized transactions, and limited ability or inability to make student loan payments (6–15). During the same time period, companies had responded to 95 percent of the complaints sent to them for response (7).

slingshot to someone else: Rich Cordray was the new nominee for director when I left the consumer agency, but he wouldn’t step into that role until the president made a recess appointment of him several months later. During the time in between, Raj Date took over as special advisor to the secretary of the Treasury for the CFPB. Raj had done a tremendous job building our research and regulatory work and taking on other critical projects, and he was now stepping into an important leadership role.