Too many in Washington and on Wall Street seem to have amnesia about the devastation the Great Recession wreaked in communities across the country – but most Ohioans don’t have that luxury.
Families who were struggling to invest in their children’s education or to save money for retirement saw years of hard work evaporate because of Wall Street greed. Many of those families are still digging themselves out – they didn’t get a taxpayer bailout.
But they did get new, strong rules to prevent another crisis and an independent consumer watchdog to protect them from fraud. The Dodd-Frank Wall Street Reform and Consumer Protection Act put in place new consumer safeguards to rein in the reckless and irresponsible behavior that helped fuel the disaster.
But this month, some in Congress moved to gut the Wall Street rules and consumer protections that have made our financial system safer for Ohio families. The bill is a massive giveaway to megabanks and payday lenders, and would dismantle the Consumer Financial Protection Bureau (CFPB), which is headed by Ohioan Richard Cordray.
In less than six years, the CFPB has returned $12 billion to 29 million Americans who’ve been ripped off by debt collectors, for-profit schools, payday lenders, and huge banks like Wells Fargo. More than 23,000 Ohioans have filed complaints with the CFPB against financial companies.
The CFPB has cracked down on companies that add hidden fees to credit cards, made the mortgage market safer for families who own or plan to buy a home, and punished predatory lenders that target military families. The CFPB has worked closely with the Department of Defense to protect servicemembers from financial predators.
Just last month, CFPB took action against the mortgage company Ocwen Financial Corp for mistreating borrowers, including nearly 700 Ohioans.
This is just the latest reminder why CFPB’s work is so important. Too many Ohioans still find themselves trapped in a vicious cycle of payday lending debt, or ripped off by prepaid cards. Wall Street banks, car title lenders, and big corporations have armies of expensive lobbyists – the CFPB is Ohioans’ cop on the beat.
Of course this doesn’t mean there’s no room for improvement. We’ve made a number of changes to even the playing field for community banks and credit unions, and I’ll continue to work with my colleagues on both sides of the aisle to better tailor the rules for small institutions.
Right now our financial system is stable and profits are up – that is all the more reason to focus on other issues that are holding back economic growth.
But that’s not what the House plan does. We need to improve the law, not turn the clock back to the days when Wall Street was free to prey on Ohioans, wreck the economy, and hand taxpayers the bill.
Sherrod Brown (D-Ohio) represents Ohio in the US Senate.