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. banasy©

    You turned your monitor upside down?? ROTFLMMFAO!!
    Oh, you always crack me up, and for that I thank you.

    December 4, 2011 at 1:12 pm | Report abuse |
  2. bobcat ( in a hat )

    Good morning to you.
    I felt like doing a little fishing today. I'm really surprised i haven't had any nibbles yet.
    Maybe I'm using the wrong bait.

    December 4, 2011 at 1:20 pm | Report abuse |
  3. gung hoe

    @ruffie you say our good jobs went with nafta wich I agree but ruff who signed nafta into law ,it wasnt reagon try clinton ! now I know my friend banasy is going to respond so Iam outta here!

    December 4, 2011 at 1:29 pm | Report abuse |
  4. gung hoe

    Before i go though what ya fishin for bobcat iah

    December 4, 2011 at 1:33 pm | Report abuse |
  5. banasy©

    @gung hoe:
    Chicken! Lmao!
    I still don't understand why you cannot grasp that the president who signs it into law isn't the one responsible for the one who had it drafted and pushed thru Congress.
    Bock bock bock.... 😉

    In this case, Ruffie's right, and you know it.

    bobcat: try chicken livers, lmao!!

    My husband is going later, he says...but he has to fix the brakes on my truck first...they went completely out the other day!

    December 4, 2011 at 1:40 pm | Report abuse |
  6. banasy©

    Oh, gung?
    NAFTA began negotiations in 1986.
    WHO was the POTUS then....?

    What do *you* like fishing for the most?
    The hubs likes salmon and lake perch...brown trout...pike...bluegil...who am I kidding? He just likes to *fish!*
    He winterized the boat the other day...I swear I saw a tear running down his cheek.

    December 4, 2011 at 1:44 pm | Report abuse |
  7. bobcat ( in a hat )

    On the fresh water I like fishing for bluegill, largemouth bass, catfish, actually anything tht will bite.
    On the big water (gulf), Red snapper, red fish, amberjack, yellowfin tuna. But my dream fish before I die is a blue marlin.

    December 4, 2011 at 2:02 pm | Report abuse |
  8. ¿┴┴∩И╛╛∩Я ( ½ ELF slayer & ½ BUGBEAR KILLER )

    REGAN=UNION BUSTER.. r.i.p. gm, and steal industry..

    December 4, 2011 at 2:37 pm | Report abuse |
  9. ¿┴┴∩И╛╛∩Я ( ½ ELF slayer & ½ BUGBEAR KILLER )

    I DON't know where we are headed but the days where a family could live off one income are long gone..
    even gas is 3$ a gallon.. so just to drive back and forth to work is expensive..

    December 4, 2011 at 2:41 pm | Report abuse |
  10. banasy©

    I hope you get your dream fish!
    My husband would love to fish the gulf again, it's been awhile.

    $3/ gallon?
    Here it's closer to $3.75/ gallon.
    You're right; the days of a one income family is long past...and then people wonder why their kids are such hellions...
    I was very lucky in that I was able to stay home with my kids through their formative years.
    Many people don't have that luxury.

    December 4, 2011 at 3:03 pm | Report abuse |
    • tasaad

      And those of us who can't afford to stay home and raise our children, but do it anyway are labeled as lazy, dope heads, alcoholics because we take a few food stamps to supplement the husbands paycheck. It doesn't matter that we do not use drugs or drink, just that we have a food stamp card.

      December 4, 2011 at 4:29 pm | Report abuse |
  11. gung hoe

    @banasy you know it bock bock bock Now as for the important stuff FISHING @BOBCAT AND BANASY man I miss living by the gulf right now Id be by the hot water discharge catching redfish. dont catch any fish no prob eat the bait right bobcat? but heck up here I fish for carp or suckers if have to. I luv fishing. Now about your brakes hum mayby pauls trieing to off you banasy luv

    December 4, 2011 at 3:11 pm | Report abuse |
  12. gung hoe

    And about nafta we all know it was just another way for the dems to line their pockets like palosie just has,and while they do that they keep their voters poor that way they get reelected ! Ever see poor people vote for republicans of couse not

    December 4, 2011 at 3:18 pm | Report abuse |
    • tb1775

      Have you ever seen a Republican looking out for the welfare of a common folk? Of-course not.

      December 4, 2011 at 4:49 pm | Report abuse |
  13. unretired05

    "Senate Republicans have vowed not to confirm a director for the agency." Why you ask? " they say the agency is not accountable enough to Congress." Not accountable to a Congress that has the approval of 9% of the citizens, imagine that. Congress isn't competent enough to raise postal rates to keep up with energy cost. Why would we want them overseeing loan protections. They are only interested in caring for their high dollar "donors".

    December 4, 2011 at 3:49 pm | Report abuse |
  14. Common Sense Is Not Common

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

    I'd like everyone to take notice of the language here. Notice that it does not say, held a gun to her head and forced her into a 50,000 loan. This woman made a conscious decision to take this loan, of her own free will. She did not research the consequences, nor analyze whether or not the loan was safe. Anyone with common sense can know whether or not you can afford a loan like this, based upon your own income... if she really needs the governments hand to tell her whether or not she can afford it, she has no business voting, let alone owning property.

    And even if the banker lied right to her face, did she not know enough about her own financial situation to know how risky a loan of this size is? If a person commits suicide, how often do you blame the rope or the gun for the problem? So its the bankers fault that she picked her pen and signed for a risky loan? This is absolutely ridiculous. That CNN published this story speaks volumes about their politics... what a crock.

    And she wants to thank Timothy Geithner? The same Timmy G that helped Clinton pass a bill in the 90's that says that banks CAN give out risky sub-prime mortgages?

    This woman is clueless. Ignorance of the laws, of economics and of logic itself, carries a heavy price indeed. She got exactly what she deserves.

    December 4, 2011 at 3:52 pm | Report abuse |
    • marty rogers

      is that how you sleep at night? it is ok to lie to a 91 year old to steal her life savings away for some soulless broker to make 4000 dollars? these are transactions are complicated and specially to the elderly, immigrants,and first time home buyers, and it is he responsibility of the professionals to behave responsibly and ethically and explain to each client truthfully what the costs and payments will be, even after a fixed rate expires. According to your soulless brainless argument, a patient is responsible if the surgeon pushes him or her to get a surgery they dont need. Same concept. merry christmas! enjoy church too.

      December 4, 2011 at 5:15 pm | Report abuse |
    • marty rogers

      btw are you referring to the Gramm–Leach–Bliley Act? the one written by three republican senators which Clinton signed into law ONLY after certain protections to prevent abuse were in place? the same protections that were later erased by 8 years of Bush dominance, 6 of which with complete republican control of both houses? are you willfully ignorant or just one of those frauds that stole money from the elderly?

      December 4, 2011 at 5:21 pm | Report abuse |
  15. RobfromMo

    Republicans have declared war on American consumers.

    December 4, 2011 at 3:55 pm | Report abuse |
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