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January 04, 2012
07:07 PM EDTFollowing the President’s appointment of Richard Cordray to lead the Consumer Financial Protection Bureau and help rein in predatory lenders, state and local officials across the country, including many of Cordray’s former Attorneys General colleagues, spoke out about the decision.
Maryland Governor Martin O’Malley:
“The CFPB now possesses the authority to ensure that payday lenders, debt collectors, and others no longer have free rein to deplete the financial health of our communities. With Richard Cordray's appointment, our states finally have a strong partner at the federal level to combat predatory and discriminatory lending.”
Massachusetts Governor Deval Patrick:
“Americans can’t wait any longer for protection from abuses in the financial markets. I applaud President Obama for taking action and appointing Richard Cordray to lead the Consumer Financial Protection Bureau. Richard Cordray is a highly qualified leader who has support from members of both parties and the credentials needed to protect homeowners, seniors and veterans from financial abuse. I wish him the best in this new position.”
California Attorney General Kamala Harris:
"American families finally have the consumer advocate we've needed for so long: Richard Cordray, the director of the Consumer Financial Protection Bureau…We're at a critical moment for the middle-class in America, and we urgently need strong oversight of our financial institutions and accountability for wrongdoing. Richard Cordray is the right person at the right time to get this job done and be a strong partner with state attorneys general."
New York Attorney General Eric Schneiderman:
"This is a major victory for American families seeking justice with the banks and other lending agencies at the heart of the financial crisis. The repeated procedural roadblocks that have blocked Richard Cordray's appointment represent the worst sort of partisan politics in Washington, and President Obama must be commended for taking action in the pursuit of meaningful protection for American consumers.
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The Consumer Financial Protection Bureau (CFPB) was established to protect American consumers from unfair, deceptive or abusive practices at the hands of financial services providers—banks, credit card companies, mortgage and payday lenders, and debt collectors to name a few.
One group in particular is often at risk of being targeted by unscrupulous lenders: servicemembers and their families who find themselves in financial trouble and strapped for cash to cover debts and expenses due to the unique challenges members of the military face.
This week last year, the Consumer Financial Protection Bureau announced that Holly Petraeus would lead the Bureau’s Office of Servicemember Affairs. The office is charged with ensuring that those who serve in the military are able to focus on their jobs and their families without having to worry about getting trapped by abusive financial practices.
The Office of Servicemember Affairs ensures that:
- Military families receive the financial education they need to make the best financial decisions for them
- Complaints and questions from military families are monitored and receive responses
- Federal and state agencies coordinate their activities to improve consumer protection measures for military families
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President Barack Obama delivers remarks on the economy at Shaker Heights High School,Shaker Heights, Ohio, Jan. 4, 2012. Richard Cordray, former Ohio Attorney General and nominee as director of the Consumer Financial Protection Bureau shares the stage with the President. (Official White House Photo by Chuck Kennedy)
President Obama was in Shaker Heights, Ohio this afternoon to talk about the fight to help secure a better future for the middle class -- and his decision to appoint Richard Cordray to lead the Consumer Financial Protection Bureau.
Speaking before a packed house at Shaker Heights High School, the President said protecting consumers is too important to wait:
When Congress refuses to act, and as a result, hurts our economy and puts our people at risk, then I have an obligation as President to do what I can without them. I’ve got an obligation to act on behalf of the American people. And I’m not going to stand by while a minority in the Senate puts party ideology ahead of the people that we were elected to serve. Not with so much at stake, not at this make-or-break moment for middle-class Americans. We’re not going to let that happen.
Richard Cordray, the former attorney general of Ohio, joined President Obama as he spoke, and the President outlined his credentials:
You know, you look at him and you think, this guy is not somebody who’s going around picking fights. And yet, this fight on behalf of consumers is something that Richard has been waging here in Ohio for the better part of two decades.
As your attorney general, he helped recover billions of dollars in things like pension funds on behalf of retirees. He protected consumers from dishonest lending practices. Before that, Richard was the state treasurer, where he earned a reputation for working with folks from across the spectrum -- Democrats, Republicans, bankers, consumer advocates -- had a great reputation across the board doing the right thing.
And, Cleveland, you’ve seen the difference that Richard can make for consumers, and I have, too. And that’s why I want Richard to keep standing up for you -- not just here in Ohio, but for consumers all across the country.The job ahead of Mr. Cordray is nothing less than ensuring the integrity of our financial system. The President said:
[We] know what would happen if Republicans in Congress were allowed to keep holding Richard’s nomination hostage. More of our loved ones would be tricked into making bad financial decisions. More dishonest lenders could take advantage of some of the most vulnerable families. And the vast majority of financial firms who do the right thing would be undercut by those who don't.
See, most people in the financial services industry do the right thing, but they're at a disadvantage if nobody is enforcing the rules. We can't let that happen. Now is not the time to play politics while people’s livelihoods are at stake. Now is the time to do everything we can to protect consumers, prevent financial crises like the one that we’ve been through from ever happening again. That starts with letting Richard do his job.
To see the full remarks, watch the video.
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President Barack Obama participates in a discussion with, from left: Mr. William Eason; Richard Cordray, former Ohio Attorney General and nominee as director of the Consumer Financial Protection Bureau; Mrs. Endia Eason; and Deonna Kirkpatrick, Communications Director ESOP (Empowering and Strengthening Ohio's People), at the Eason home in Cleveland, Ohio, Jan. 4, 2012. (Official White House Photo by Pete Souza)
For William and Endia Eason, the trouble began in 2001. Officials in Cleveland issued the couple a citation to make repairs to bring their home up to code.
Then a mortgage broker knocked on their door, telling the Easons that they needed a loan to get the work done. They would go to jail, he said, unless they made the changes, and after telling them it was too late to back out of the loan process, the broker talked the couple into borrowing $8,000 to repair their steps, garage, and roof.
He also convinced them to open up a line of credit -- backed by the deed on their home -- that he said would help them make the changes to the house. The repairs never got done, however, and the loan flipped multiple times.
After living in their home for 30 years, the Easons suddenly found themselves owing almost $80,000. When they fell behind on the payments, the lender started the foreclosure process. In desperation, the Easons reached out to a nonprofit that assists victims of predatory lending -- and with support from that nonprofit, they were able to convince the mortgage company to write off part of the loan and back away from foreclosure. The mortgage broker, on the other hand, made $4,000 from the deal and walked away.
That's the story that William and Endia Eason told President Obama when they met with him today, and it's the perfect illustration for why he appointed Richard Cordray to lead the Consumer Financial Protection Bureau.
This week, CFPB is officially launching a service that could have helped the Easons. They're establishing a 1-800 hotline for mortgage related consumer complaints. The Bureau will forward each issue to the proper financial institution for review and resolution. And if the institution doesn't resolve the issue, CFPB will investigate the complaint directly and make sure that the financial institutions are held accountable under Federal law.
If we'd had the Consumer Financial Protection Bureau ten years ago, the Easons and families like them across the country could have turned to this resource for help.
But going forward, the Bureau will be a watchdog for anyone who owns a mortgage, uses a credit card, or applies for a loan. And that's good news for families like the Easons.
Josh Earnest is Principal Deputy Press Secretary and Special Assistant to the President.
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More than 14 percent of consumers have one or more debts in collection. Debt collection, the business of recovering money owed on these delinquent accounts, can create economic value, but it can also be a source of abuse against consumers. In fact, nearly 50 percent of complaints about debt collectors obtained under the Fair Debt Collection Practices Act cite harassment.
Personal hardships such as divorce, family member death, illness or job loss are often the precursors to a household falling behind on debt payments. Without resources that explain people's rights and responsibilities when dealing with debt collectors, coercive collection tactics can easily pressure consumers into making decisions that aren’t in their best financial interests.
The Consumer Financial Protection Bureau, or CFPB, will change all that. For starters, the Bureau will work to help people understand their obligations as borrowers, as well as the protections available to them when they deal with all types of financial service providers, from debt collectors to credit card companies to mortgage lenders. Secondly, the Bureau will establish and enforce rules that put an end to unfair, deceptive, or abusive practices at the hands of these providers, many of which have never been regulated before.
To learn more about CFPB, the first-ever Federal agency charged with protecting American consumers, see:
- Consumer Financial Protection Bureau 101: Why We Need a Consumer Watchdog
- America's Consumer Watchdog: President Obama appoints Richard Cordray to head the Consumer Financial Protection Bureau
- Reining in Predatory Lenders with a Consumer Watchdog
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The Consumer Financial Protection Bureau (CFPB) is a central part of President Obama's historic Wall Street Reforms. Their job is to make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products. Many people have expressed confusion about this agency, so we put together answers to some of the questions we've been asked.
What is the Consumer Financial Protection Bureau?
Why do we need a Consumer Financial Protection Bureau?
Why is it so important to regulate these so-called non-bank financial institutions?
How can the Consumer Financial Protection Bureau protect me and my money?
What progress has the Consumer Finance Protection Bureau already made?
Resources to learn more or get help now
What is the Consumer Financial Protection Bureau?
The Consumer Financial Protection Bureau (CFPB) was created to make sure that the financial products and services that Americans depend on every day —including credit cards, mortgages, and loans—work better for the people who use them.
Established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, CFPB is charged with overseeing the Federal financial laws that specifically protect consumers—people who keep their money in banks and credit unions, pay for goods and services with their credit cards, and rely on loans to buy homes or pay for college, among other services.
The Bureau is tasked with making sure people understand the fine print that explains the risks involved in using these services, and ensuring the banks, credit unions, and other financial companies that provide them play by the rules.
Why do we need a Consumer Financial Protection Bureau?
Before CFPB was established, seven different Federal agencies were responsible for various aspects of consumer financial protection. No single agency had effective tools to set the rules or oversee the whole market, and that is part of what led to an economic crash of epic proportions. As President Obama explained in his speech in Osawatomie:
We all know the story by now: Mortgages sold to people who couldn’t afford them, or sometimes even understand them. Banks and investors allowed to keep packaging the risk and selling it off. Huge bets – and huge bonuses – made with other people’s money on the line. Regulators who were supposed to warn us about the dangers of all this, but looked the other way or didn’t have the authority to look at all.
Moving forward, CFPB will be the single, consumer-focused regulating authority, consolidating the existing authorities scattered throughout the Federal government under one roof. And, the Bureau’s oversight includes the large banks and credit unions that had historically been regulated by the Federal government, as well as independent and privately owned “non-bank financial institutions” that had never been regulated before.
This means that for the first time, the Federal government will be able to regulate the activities of independent payday lenders, private mortgage lenders and servicers, debt collectors, credit reporting agencies, and private student loan companies.
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Today the President will appoint Richard Cordray to lead the Consumer Financial Protection Bureau. He has one important job: look out for the best interest of American consumers. He’ll work on behalf of millions of families across the nation to ensure they’re not being taken advantage of by debt collectors and credit reporting agencies. As America’s consumer watchdog, Cordray will work to ensure that families and students don’t get saddled with sky-high interest rates by mortgage or payday lenders. Bottom line: he’ll strengthen oversight and accountability in order to protect millions of families across the nation. This is an important step to protect the American people.
The President nominated Mr. Cordray last summer. Unfortunately, Republicans in the Senate blocked his confirmation. They refused to let the Senate go forward with an up or down vote. It’s not because Republicans think Cordray isn’t qualified for the job, they simply believe that the American public doesn’t need a watchdog at all. Well, we disagree.
And we can’t wait for Republicans in the Senate to act. Now, you might hear some folks across the aisle criticize this “recess appointment.” It’s probably the same folks who don’t think we need a tough consumer watchdog in the first place. Those critics might tell you that Wall Street should write their own rules. Or you might hear them say the American people are better off when everyone is left to fend for themselves. Again, we disagree with those critics.
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Ed note: This has been cross-posted from the Department of Transportation's Fastlane blog
When we say at DOT that safety is our number one priority, we are not kidding around. And today, as part of that important goal, President Obama signed into law the Pipeline Safety, Regulatory Certainty, and Job Creation Act.
Last April, following several fatal pipeline accidents, we called upon U.S. pipeline owners and operators to conduct a comprehensive review of their oil and gas pipelines to identify areas of high risk and accelerate critical repair and replacement work. We also convened a Pipeline Safety Forum with state officials, industry leaders, and other stakeholders to discuss steps for improving the safety and efficiency of America's pipeline infrastructure.
In one of their final actions for 2011, the House and Senate passed a pipeline safety bill consistent with the legislative proposal we submitted to Congress last year. This legislation gives the Pipeline and Hazardous Materials Safety Administration, an important part of DOT, stronger enforcement tools and increases civil penalties for pipeline operators who do not meet safety regulations. It's another terrific step forward for greater pipeline safety.
Not only will this legislation help keep America's communities safer; it also helps give pipeline operators the certainty they need to run their systems more effectively.
To advance pipeline safety, the bill doubles the maximum fines that pipeline operators face for safety violations. The Bill requires PHMSA to issue new pipeline safety standards requiring operators to install automatic or remote-controlled shut-off valves and excess flow valves in new or replaced transmission pipelines. As U.S. Senator Jay Rockefeller said, "Communities can rest a little easier knowing that Congress has implemented tougher safety rules."
The bill authorizes PHMSA to award $110 million in safety-related grants each year. These include state damage prevention programs, technical assistance to local communities, emergency response training, and one-call system improvements. And PHMSA is authorized to add a number of new pipeline inspectors to support its investigation and enforcement obligations.
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President Barack Obama signs H.R. 847, the “James Zadroga 9/11 Health and Compensation Act” in Kailua, Hawaii, Jan. 2, 2011. (Official White House Photo by Pete Souza)
“We will never forget the searing images of September 11, 2001. And we will never forget the selfless courage demonstrated by the firefighters, police officers, and first responders who risked their lives to save others. In the face of unspeakable brutality and evil, these brave men and women demonstrated the enduring strength of our values and the American spirit. Many who survived did not emerge from the dust and debris unscathed, facing continuing health problems as a result of their service.
On January 2, President Obama signed the James Zadroga 9/11 Health and Compensation Act into law, ensuring that rescue and recovery workers, residents, students, and others suffering from health consequences related to the World Trade Center disaster would be able to access the medical treatment they need.
The act established the World Trade Center Health Program, and expanded eligibilty for compensation under the September 11th Victim Compensation Fund of 2011.
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Ed. Note: Cross-posted with the Small Business Administration Blog.
Last week, President Obama signed a bill reauthorizing the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs for another six years. This long-term reauthorization is good news for the innovative small businesses that these programs support. SBIR and STTR invest about $2.5 billion a year in America’s most promising small research and development companies. Through SBIR and STTR, federal agencies with large R&D budgets provide competitive awards to help small businesses bring their best innovations from the drawing board to the marketplace. SBIR and STTR operate in three phases, providing support for research, development, and commercialization.
Over the years, SBIR and STTR have played a role in the growth of firms like Qualcomm, Symantec, and others. From 2002 to 2006, about 25% of R&D Magazine’s top 100 annual innovations came from companies that had received an SBIR grant at some point in their history.
Despite this track record, the future of SBIR and STTR had been subject to repeated short-term funding from Congress over the past ten years. This new, long-term reauthorization provides certainty and stability for the small businesses that leverage these programs to create jobs. In fact, it strengthens SBIR and STTR, proving more funding for small businesses to drive innovation, create jobs, and grow our economy. It increases the amount these programs can award to small businesses, shortens the timeline for award decisions, and improves the focus on commercializing the innovative products that will change the world.
SBIR and STTR are a win-win. Federal agencies are able to meet their R&D needs, while small businesses get the chance to bring their innovations into the marketplace. The reauthorization ensures that small businesses will have access to much needed investments. Money from these programs will go directly to small businesses to help them drive innovation, strengthen U.S. competitiveness, and create good jobs. -
Throughout 2011, staffers at the White House Photo Office followed the President, Vice President, and First Family across the country and around the world. They were on hand for moments that made history -- and captured what it's like to go behind the scenes with the Obama administration.
Now, they've compiled some of their favorite images from 2011. Check out the slideshow (and click through for captions).
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