In a new white paper, Richard Cordray, the former Director of the Consumer Financial Protection Bureau (CFPB), outlined the steps he alleges the CFPB needs to be taking right now in the face of an economic crisis caused by COVID-19.
“[The Bureau] is relaxing various duties for financial companies and continuing to push the industry to comment on regulatory initiatives at a time when the focus needs to be placed on the grave economic hardship now confronting millions of Americans,” Cordray says in a whitepaper published on Medium. “The CFPB has the legal authority needed to take urgent steps to prevent many consumers from sliding off the financial cliff.”
First, Cordray encourages the CFPB to assemble a detailed picture of what is going on in the consumer marketplace. According to Cordray, the CFPB should use its consumer complaint response system to learn from consumers what exactly is happening and make the answers publicly available.
Cordray also notes that the CFPB should be doing what it can to help people avoid foreclosure and eviction. This means keeping Americans informed of the state and federal relief options available to them.
“In the CARES Act, Congress has provided a much simpler mechanism for many consumers to seek and obtain relief from foreclosure if they miss mortgage payments during the crisis,” Cordray said. “The CFPB must use its supervision authority to monitor the banks and financial companies, making sure they follow through in making such relief available to consumers.”
Additionally, the former Director states that the CFPB should be helping lenders and officials “fashion ways to reduce loan delinquencies and defaults,” specifying the need for simplicity.
“The CFPB should be in the lead in pressing the companies to help, such as by waiving overdraft fees, NSF fees, or late fees and by providing forbearance on loan payments,” Cordray said. “These initiatives must be simple and, if not automatic, must be easy to access; complexity was the Achilles heel of many such programs a decade ago.”
Editor's note: As of press time, the CFPB has not responded to a request for comment.