Prepared Remarks of CFPB Director Richard Cordray at the U.S. Conference of Mayors
Thank you for inviting me to come speak with you once again. When I was here in 2012, the Consumer Financial Protection Bureau had just opened its doors. Today, I come to you after more than two years of concrete accomplishments. We have helped solve tens of thousands of individual consumer problems. We are returning over three billion dollars to consumers so far, and we have gone after those who try to take advantage of them. And we have put in place new rules that bring historic changes to make the multi-trillion dollar mortgage market work better for consumers and help see to it that the terrible collapse we went through just five years ago will never happen again.
Building a consumer financial marketplace that is more effective and more sustainable is the central priority of this new agency. We received this mandate from Congress in response to the dire situation that confronted Americans across the country after the housing collapse. Everyone who came to work at the new Consumer Bureau chose to take on this mandate with great passion and determination. We recognize that we can only be successful if we work in close partnership with federal, state, and local officials. That is why I am here today. Together, we must make the consumer financial markets work again – not just for Wall Street investors but for everyday Americans.
The financial crisis showed us how irresponsible lending can assault the foundations of stable communities, with the damage taking many years to repair. Bad products can upend whole neighborhoods as well as individual households. You can tell me better than I can tell you how in the years following the crisis, vacant properties became not only eyesores but also magnets for drugs and crime. Even many people who had carefully steered clear of trouble learned that trouble could find them anyway – costing them their jobs, sometimes their homes, and usually a considerable portion of their household wealth. Residents saw their property values decline and parents worried about their children’s safety. As often seems to happen, cities bore the brunt of the damage and most of the bottom-line costs of problems created by others.
We have spent the last five years digging out from under all of that. Some cities and some regions have fared better than others. As you know, the state of America’s cities varies greatly. Some are on the fast track to recovery with jobs being created, housing values on the rise, and confidence returning. Others are still feeling the sluggishness of shaking off a tough economy.
My colleagues and I at the Consumer Bureau appreciate the outstanding role that mayors play in the building of America. We applaud you on the many ways you do that, including your efforts through the DollarWise campaign. This campaign promotes financial education and supports summer youth employment through innovations and enhancements to existing programs.
Municipal officials across the nation make strenuous efforts to help their people. But we need to recognize that many consumer problems may transcend the boundaries of your local jurisdiction. There is only so much you can do when it comes to saving someone’s home or protecting people against financial predators. So that is where the Consumer Financial Protection Bureau comes in. One of our key tools for helping Americans across the country has been our Consumer Response function. Let me take a few minutes to describe this for you, because it is a tool that can benefit every one of you and all of your constituents.
When the President and the Congress created our new agency, they gave us a crucial means of helping individual consumers. We take complaints about a wide range of products and services that people use every day, and where too often they find themselves being mistreated. The list is long, so bear with me – we take complaints about mortgages, credit cards, bank accounts, student loans, auto loans, credit reporting, debt collection, consumer loans, money transfers, and payday loans. Each perceived grievance is a chance for us to get a better handle on a problem and see if it can be addressed successfully. That may mean getting some or all of the consumer’s money back. It may mean fixing or clearing up a mistake or some other kind of problem.
You and your staffs no doubt hear complaints about these kinds of issues all the time. They often involve large national or international companies and require specialized expertise, so addressing them can be frustrating and difficult. What can or should you do about them? Here is a brand-new answer: send them to us. Give us a chance to use our authority and know-how to help the people you care about. We will not always be able to get an individual solution for each consumer, but we will work hard to get them a response from the company and we will resolve a good number of them. This is a good strategy for you. We want to be your key resource on consumer finance issues.
We have grasped the importance of making it easy for consumers to submit complaints. Even in more intricate matters, it should take them less than thirty minutes. They can do it by going online to ConsumerFinance.gov. Or, they can do it by calling 1-855-411-CFPB, where we have trained operators who can provide services in dozens of languages. No longer should your folks feel helpless because they stand alone against a large and powerful financial company. We, the new Consumer Bureau, are now standing on their side to see that they are being treated fairly. That is exactly what every consumer deserves.
Once a consumer submits a complaint to us, it is individually processed. We typically forward it via a secure web portal to the appropriate company, which reviews the information, communicates with the consumer as needed, and determines what action to take in response. The company is required to address the issue on a fairly quick time frame. If the consumer is not happy with the company’s answer, they can send us feedback. We review this feedback, along with other information such as the timeliness of the company’s response, to prioritize complaints for investigation. Throughout the process, consumers can call us or log onto our website to receive status updates, and provide additional information.
Please help your constituents understand that there is nothing strange or unusual about submitting a consumer complaint. Thus far, we have received more than 270,000 complaints from individual consumers and helped to address many of them. Our volume is growing: we received about 600 complaints in our first month, and we received over 15,000 complaints last month. But as people become more aware of us, we expect to continue to receive even more complaints. That is helpful to us because these complaints give us insight into what is happening to consumers around the country, right now. So far, for example, we have received over 27,000 complaints about credit reporting, over 31,000 about debt collection, and over 109,000 about mortgages. That is a lot of trips to the plate, and we are getting our share of base hits. To date, we have helped consumers secure millions of dollars in monetary relief and further satisfaction in the form of non-monetary relief, such as cleaning up their credit reports or stopping harassment by debt collectors.
Let me put it more vividly by sharing some of the personal stories. For example, we have helped people like Krystal from New Jersey, who submitted a mortgage complaint to us on Saturday afternoon and had it resolved by Thursday. Then there was Ezra from Arizona, who was having a hard time getting the free credit report to which he was entitled. He said he was going around and around with the company but after contacting us, it sent him notice that he would be receiving his report very shortly, which he did.
And there was Joanna from Texas, who had $400 in credit card fees returned to her after contacting us. She wrote to us afterward to say: “My credit card company’s treatment of me before and after being contacted by the CFPB was like night and day.”
Complaints are not only opportunities for us to help specific people; they also make a difference by informing our work and helping us identify and prioritize problems. We know that if we hear about a particular problem from fifty consumers, it likely looms larger than if we hear about it from two. We know that if we begin to see a disturbing trend, we should consider allocating some of our limited resources to combat that particular problem.
So complaints are also important because they enable us to listen to any American who wants to be heard. They are our compass, and they tell us all about people’s problems in real time so we can take more immediate action – not several quarters or even years later when reports or studies have finally been completed.
Even if a consumer does not wish to submit an actual complaint, they can still tell us about their experiences with financial products and services through the “Tell Your Story” feature of our website. These stories are also very helpful and informative to us – so much so that we circulate selected stories to be read by our entire leadership team every week.
Each consumer’s voice counts, and the chorus of many voices can change practices at these companies. We can send our examiner teams inside the companies to fix systemic problems, and we can use our enforcement teams to investigate, clean up, and deter violations of the laws.
One particular person comes to mind here. Harry from Massachusetts contacted us through “Tell Your Story” to describe how his son Ari, a 21-year-old infantry soldier, was hurt by a subprime auto loan. Harry had already done whatever else he could to call attention to the company’s deceptive marketing, and he felt like he had gotten nowhere. But Harry deserves all the credit in the world. After hearing from him, we opened an examination that resulted in an order returning $6.5 million to thousands of servicemembers across the country. When Harry just took a little bit of time to tell us what had happened to his son, he ended up helping an awful lot of people.
Here are four other concrete ways you can help us help you and your constituents. First, the talented people at the Consumer Bureau are developing a great set of financial education tools. We firmly believe that the best and most immediate form of consumer protection is self-protection: being able to avoid problems in the first place. So you can find important resources for consumers on our website. “Ask CFPB” is a database of over one thousand frequently asked consumer questions and our best expert answers. Our “Paying for College” set of tools walks families through the key issues involved in figuring out how to navigate their choices to finance higher education, including the “Financial Aid Shopping Sheet” to calculate their real student loan costs. Just go to ConsumerFinance.gov, check out what we have to offer, and share these resources with your constituents. The information is unbiased and easy to understand.
Second, we are undertaking an initiative called “Your Money, Your Goals.” This program helps those who work with low-income and economically vulnerable consumers. It is designed to be used by social services staff to help their clients manage their financial affairs more effectively. It trains them to assist their clients in identifying financial challenges and goals, creating savings plans, managing debt, choosing financial products, and accessing consumer protections. Mayors can play a key role in working with us to provide this tool to their local social service agencies.
Third, we have an incredibly valuable program that deserves your special attention. We all know that young people are having a harder and harder time managing the growing burdens imposed by student loan debt. For this generation, student loans have become an obstacle that inhibits people from participating fully in the economy, buying a home, starting a family, or making a go at trying to build a business. When you are recruiting these recent college graduates, you may be finding that their student loan debt causes them to steer away from careers in teaching, health care, law enforcement, and other public service fields. They want very much to do it, but they fear that it may leave them unable to dig out from under a mountain of student loans.
You now have a big trump card up your sleeve for recruiting and retaining some of these young people, but it does not help you if you do not know it is there. The Consumer Bureau recently launched a workplace financial education initiative to empower public service organizations – including municipal governments and school districts – to help their employees manage their student debt. The initiative is built around a federal law that allows employees in the public and nonprofit sectors to have their student loan debt forgiven if they meet certain requirements for building a career in public service. This covers many members of your own workforce as well as many young people who are employed by the nonprofit organizations in your communities.
We have asked cities, school districts and nonprofits to take a pledge to help their employees understand their options that can save them thousands of dollars and keep them doing work that they love and that directly improves the quality of life in your cities. If you take our pledge, we will provide training, materials, and the support you need to get this initiative up and running. In August, the Mayor of South Bend, Indiana became our first partner by taking this pledge to support the police officers, firefighters, teachers and other municipal employees in his city. He shared with me some of the touching emails he received from city staff about how much this initiative would do to relieve strain and improve their lives. I want each of you to take the pledge and get similar emails from your own people who should be benefiting in the same way.
Fourth, I want to tell you about our 3-1-1 pilot partnerships with a growing number of cities: Boston, Massachusetts; Newark, New Jersey; St. Louis, Missouri; Jackson, Mississippi; and (let me just frankly say it, nearest to my heart, since I still commute from there every week) Columbus, Ohio. We know that the Mayor’s office is a kind of first responder for all kinds of issues and that is a heavy load. So we have agreed to have the issues raised about consumer financial products sent to our Consumer Response team. Many of these calls are now forwarded directly to us through our partner cities’ 311 systems.
These pilot partnerships have been a great win-win. Consumers can reach the Bureau more directly. Cities can potentially lighten their loads and refer their residents to the experts. So I am very pleased to announce today that we are now partnering with the U.S. Conference of Mayors on a nationwide effort to sign up as many cities as possible by our July anniversary. We want to be able to celebrate our third birthday by having dozens more cities join this initiative. This approach will be a plus for you and your constituents.
Since you gave me the bully pulpit for a few minutes today, I am not going to miss the chance to push you all on the critical importance of financial education in our schools. Last year, we released our policy recommendations for youth financial education – starting in kindergarten and continuing through the end of high school. Every school district should make this part of the basics that we teach our children, with no exceptions and no excuses. Your advocacy can help make that happen. It is a shame and a scandal that we have done such a poor job in this area over the years, sending our young people out into the world practically defenseless against the predators waiting eagerly to take advantage of their ignorance and inexperience. We can and must do better, at long last.
As you can see, we are striving to fashion a consumer financial marketplace that works for everyday Americans. It takes great teamwork to get this country back on the right track. You can count on everyone at the Consumer Financial Protection Bureau to seek out ways we can be of further help to you and your cities. Thank you.
The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.