“The Agency That’s Got Your Back,” screams the headline in the Aug. 24 issue of Time magazine (subscription required). Being read all over the hinterland this week is reporter Massimo Calebresi’s profile of the four-plus-year-old Consumer Financial Protection Bureau, “a little-known government watchdog [that] is striking fear into the lending industry.”
That portrait of a regulator as the consumer’s friend is a far cry from much of the coverage given the bureau since it was created by the 2010 Dodd-Frank Financial Reform Act. Republicans in Congress have attacked its funding structure, recess-appointed director, alleged discrimination against female and minority employees, and its building renovations.
Many in the lending and credit card industries have warned of a new Washington bully.
“CFPB is the most powerful agency we have seen in Washington since J. Edgar Hoover ran the FBI,” said banking lobbyist Richard Hunt in the Time piece.
The article showcases a retired Michigan teacher, a Republican who opposed the bureau’s creation, but who changed her tune last year. Desperately behind on her mortgage, she filed a complaint against a mortgage lender who tacked an $11,599.32 surcharge onto her emergency refinancing. A day after she described her treatment on the CFPB website, she received an email saying investigators were on the case. Four days later, the lender Fed-Ex-ed her substitute papers that omitted the new fee.
Said Time, “The consumer complaint service is an ideal place to start understanding how in four short years the CFPB has become one of the most effective and feared regulators in Washington.”