The Consumer Financial Protection Bureau: Like a mechanic with no tools?
U.S. Treasury Secretary Timothy Geithner is pushing the Senate to confirm a director to run the Consumer Financial Protection Bureau.
December 4th, 2011
09:06 AM ET

The Consumer Financial Protection Bureau: Like a mechanic with no tools?

Tim Geithner might be Endia Eason’s new best friend. If he lived in Cleveland, she’d probably bake him a pie.

“My pies are the best pies in town – they’ve been saying that for years,” Eason says. “I make apple, sweet potato, peach and cherry.”

So why would a 91-year-old woman in southeast Cleveland want to bake a pie for the U.S. treasury secretary?

CNN's Libby Lewis reports on how Geithner helped the "best" pie baker in Cleveland

Because lately, Geithner has been publicly nudging Senate Republicans who have hamstrung a new consumer protection agency – created to protect homeowners like Eason, and to stop what happened to her from happening to other people.

Obama renews push for consumer bureau chief

Eason nearly lost her home because a mortgage broker talked her into a $50,000 loan.

The Consumer Financial Protection Bureau is the cornerstone of the sweeping Wall Street reform law known in shorthand as Dodd-Frank. It opened its doors in July. But it’s been operating with one hand tied behind its back. Senate Republicans have vowed not to confirm a director for the agency.  They say the law puts too much power in the hands of a single director. And they say the agency is not accountable enough to Congress.

Without a director, the agency can’t regulate many financial services companies that aren’t banks: payday lenders, mortgage brokers, and consumer finance companies, for instance. Some of those companies were blamed for some of the worst abuses in the recent housing crisis.

“Now I know there are people in the Senate who have concerns about the scope of authority of this agency,” Geithner told reporters last week. “But I would ask: Who are they protecting? What are they protecting? Whose interest are they protecting? It’s not consumers.”

Steve Bartlett heads a group that represents major financial institutions. Speaking at a conference of the Consumer Federation of America,  Bartlett cast the Senate Republicans’ opposition this way:

“The Constitution says the president shall sit with the advice and the consent of the Senate. What seems to be missing is the advice part. So there is an impasse at this point.”

Mark Seifert, who heads a housing counseling group in Cleveland, said the Senate gave plenty of advice – before it passed Dodd-Frank.  He said the consumer agency Dodd-Frank created has a simple premise: keeping people from getting ripped off.

“It really comes down to – would you put your own grandmother in this loan program?”

Seifert says without a director, the Consumer Financial Protection Bureau is like a car mechanic  without tools.

“The mechanic says, 'Well, anything you need fixing that takes a screwdriver, I can do. But if it requires a ratchet, sorry, there’s not much I can do.' That’s what Congress has done with the CFPB. They don’t have a ratchet.”

Without a director, the CFPB can’t rein in mortgage brokers like the one who approached Endia Eason and her husband, a retired postal worker, in 2001.

The broker knocked on their door and told them he knew the city had cited them because their front steps needed repairing. Seifert says the broker told the Easons they’d go to jail unless they took out a loan.

He talked the Easons into borrowing $8,000 to repair their steps, and their garage and their roof too. And he convinced them to open a line of credit – backed up by the deed on their home. And he promised to help them get the repairs done.

He was so friendly, Endia Eason made him dinner.

The Easons showed up to sign for an $8,000 loan. They didn’t know about all the hidden fees the broker had packed in, Seifert says.

“By the time they knew it, they were hit – where their house is worth $50,000 and their loan is near $50,000,” Seifert says.

The Easons signed the contract, because the broker said it was too late to back out. And they believed him.

When they fell behind on the payments, the lender started the foreclosure process.

Seifert’s housing group persuaded an executive from the mortgage lender  to meet the Easons and tour the neighborhood.  The company decided to write off part of the loan, and back off foreclosing on the Easons.

The mortgage broker, on the other hand, got $4,000 from the deal – and walked away. He hadn’t broken any consumer protection laws.  Seifert says it’s this kind of situation that the CFPB needs a ratchet to fix.

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Filed under: Economy
soundoff (99 Responses)
  1. McMillian's Wife

    1.) You can write stupid.

    2.) Sorry your loved one blew the paycheck on lottery tickets.

    3.) This has nothing to do with the lottery, stupid.

    December 4, 2011 at 5:43 pm | Report abuse |
  2. brad

    See ya later repubs, keep being the party of no and you will get on the unemployment line so fast your heads will spin.

    December 4, 2011 at 5:50 pm | Report abuse |
    • us1776

      No kidding !

      .

      December 4, 2011 at 5:51 pm | Report abuse |
  3. abby

    The GOP does not want consumer financial protection because big business doesn't want it. Plain and simple.

    December 4, 2011 at 6:16 pm | Report abuse |
    • skytag

      I'm not so sure. I think they may genuinely naive enough to actually believe such regulation is unwarranted. I think they live in a dream world, but I think they really do live there.

      December 4, 2011 at 7:01 pm | Report abuse |
  4. Pearl

    Certain policies should be in place regarding the elderly; a risk asesment, an indepenent risk auditor. This women is 91 yrs old, who else's desk did this paper work go bye? Also this women obviously had NO one over seeing her finances, the questions are endless.
    Finances , drivers licence, day to day care, he mental status, physical status and so on.
    Wish Cnn could have dug deeper! 😦
    So many wholes in the almost all Cnn articles, makes me sick!

    December 4, 2011 at 6:36 pm | Report abuse |
    • skytag

      The elderly tend to be easy targets for con artists. I'm not sure why, but it's true. They are heavily targeted by a variety of scams.

      December 4, 2011 at 7:03 pm | Report abuse |
    • cmcle

      skytag - I believe one reason the elderly are such easy targets is because when they were growing up, society was much more honest. There weren't hordes of people out there trying to rip you off. When this woman was growing up, and even for most of her adult life, if someone gave you financial advice, you believed them, you trusted them, because you could be confident (though not absolutely certain) that they were telling you the truth. Times have changed, and now, unfortunately, you need to be skeptical of almost everyone.

      December 4, 2011 at 7:20 pm | Report abuse |
  5. David

    The mortgage broker that ripped off the elderly people is the prototype of today's Republican and exactly the reason they oppose consumer protections.

    December 4, 2011 at 6:40 pm | Report abuse |
  6. Fanny Farquair

    @Pearl:
    The greedy people who gave the green light to this poor woman's loan didn't care...hence the reason we need The Consumer Financial Protection Bureau, and the reason the GOP doesn't want it is because it wants to continue to prey on people like Endia Eason.

    December 4, 2011 at 6:42 pm | Report abuse |
  7. Pearl

    The broker did violate any laws, huh!!!!!!!!!!!! I buy a car and the car dealer says everything works, then a week later I'm spending 200 here 500 there; "NOTHING WRONG" MY A S S
    Same thing with these loans, ALL NEEDS TO BE REVEALED!!!!!!!!!

    December 4, 2011 at 6:44 pm | Report abuse |
  8. Pearl

    @Fanny Farquair, CFPB, according to the article doesn't have all it's tools to do their job. Also it must a nice little kick back to the GOP for something.
    People SUCK!!!!!!!
    Some do.

    December 4, 2011 at 6:47 pm | Report abuse |
  9. skytag

    In my opinion it's inexcusable for Republicans to sabotage a government agency by refusing to confirm appointments. If an appointee is qualified he should be confirmed. If Republicans don't like something about the agency they address that with legislation once they have the numbers to do that. This isn't the only position that's vacant because of Republicans' refusal to confirm well-qualified people, not by a long shot. Shameful.

    December 4, 2011 at 6:54 pm | Report abuse |
  10. skytag

    "The broker knocked on their door and told them he knew the city had cited them because their front steps needed repairing. Seifert says the broker told the Easons they’d go to jail unless they took out a loan."

    Remember this the next time some brainwashed fool on the right tells you the subprime mortgage debacle was caused by Congress forcing banks to make bad loans. You'll find lots of stories like this, but you'll never find one about a bank being forced to make a loan it didn't want to make.

    December 4, 2011 at 6:58 pm | Report abuse |
  11. Pearl

    @ SKYTAG, if that is the case, then I would never call America a Demorcratic society

    December 4, 2011 at 7:02 pm | Report abuse |
    • skytag

      If what is the case? Republicans not confirming appointments? It's true.

      "Treasury Secretary Timothy Geithner noted Monday that the failure to fill vacancies in several agencies was making it difficult to write all the rules called for by new financial regulatory legislation, such as the Dodd-Frank bill passed last year.

      Blocking confirmations makes it “less likely that there will be enough capable people in the regulatory bodies to bring the care and judgment necessary for the new rules to work,” Geithner said."

      http://www.thefiscaltimes .com/Blogs/Capital-Exchange/2011/06/07/Republicans-Block-Key-Economic-Appointments.aspx#page1

      December 4, 2011 at 7:07 pm | Report abuse |
  12. Fanny Farquair

    @Pearl: which is exactly why I said that the GOP doesn't want it. And you're sooooo right....the people fighting against this SUCK!!!

    December 4, 2011 at 7:06 pm | Report abuse |
  13. 14401

    As far as most of us can see, all these kinds of agencies are without leadership. It starts at the top and works it's way down through government like a boa constrictor snake. The result is what we have now. corruption, and chaos in every branch of government. Get out all of you. Get out now.

    December 4, 2011 at 7:09 pm | Report abuse |
  14. Fanny Farquair

    @skytag: I believe it is because the majority of them are trusting souls who lived through a simpler time when rampant greed wasn't so evident as it is today. We, as a society, need to protect our elderly, because it is evident that our legislators will not.

    December 4, 2011 at 7:11 pm | Report abuse |
  15. Pearl

    yep, would you say handing a 10 yr old this loan would be fair? Of course not.
    @ skytag, I was refering to this in your 6:58 post "Congress forcing banks to make bad loans"

    December 4, 2011 at 7:14 pm | Report abuse |
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