Why We Need a Strong Consumer Financial Protection Bureau

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A by-the-numbers look at the reasons American families need a strong CPFB.

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Why We Need a Strong Consumer Financial Protection Bureau

  1. 1. Why U.S. families need an independent Consumer Financial Protection Agency
  2. 2. Why U.S. families need an independent Consumer Financial Protection Agency This is no fairy-tale…
  3. 3. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Average “free checking” overdraft fee: $34 </li></ul>
  4. 4. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Average “free checking” overdraft fee: $34 </li></ul><ul><li>Average amount of actual overdraft: $17 </li></ul>
  5. 5. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Average “free checking” overdraft fee: $34 </li></ul><ul><li>Average amount of actual overdraft: $17 </li></ul><ul><li>A reasonable cost for credit: Priceless </li></ul>
  6. 6. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Annual dealer interest rate overcharges (kickbacks) on car loans: $20 billion </li></ul>
  7. 7. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Annual dealer interest rate overcharges (kickbacks) on car loans: $20 billion </li></ul><ul><li>Extra cost to family buying $20,000 used car: $1,000 - $3,800 </li></ul>
  8. 8. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Annual dealer interest rate overcharges (kickbacks) on car loans: $20 billion </li></ul><ul><li>Extra cost to family buying $20,000 used car: $1,000 - $3,800 </li></ul><ul><li>Knowing the real cost of the “deal”: Priceless </li></ul>
  9. 9. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Fees paid each year by low-income families for tax refund anticipation loans (RALs): $1.6 billion </li></ul>
  10. 10. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Fees paid each year by low-income families for tax refund anticipation loans (RALs): $1.6 billion </li></ul><ul><li>Cost of using RAL to get your tax refund earlier: $30 per day </li></ul>
  11. 11. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Fees paid each year by low-income families for tax refund anticipation loans (RALs): $1.6 billion </li></ul><ul><li>Cost of using RAL to get your tax refund earlier: $30 per day </li></ul><ul><li>Protecting taxpayers: Priceless </li></ul>
  12. 12. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Terms of a typical payday “cash advance” loan: </li></ul><ul><li>Total balance due in 2 weeks, 400% annual interest rate </li></ul>
  13. 13. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Terms of a typical payday “cash advance” loan: </li></ul><ul><li>Total balance due in 2 weeks, 400% annual interest rate </li></ul><ul><li>Percent of payday loans where repayment puts borrower “in the red” and needing another loan : 76% </li></ul>
  14. 14. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Terms of a typical payday “cash advance” loan: </li></ul><ul><li>Total balance due in 2 weeks, 400% annual interest rate </li></ul><ul><li>Percent of payday loans where repayment puts borrower “in the red” and needing another loan : 76% </li></ul><ul><li>Loans that don’t trap you in debt: Priceless </li></ul>
  15. 15. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Year Congress gave the Federal Reserve authority to address unfair mortgage lending: 1994 </li></ul>
  16. 16. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Year Congress gave the Federal Reserve authority to address unfair mortgage lending: 1994 </li></ul><ul><li>Year the Fed finally proposed mortgage rules:  2008 </li></ul>
  17. 17. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Year Congress gave the Federal Reserve authority to address unfair mortgage lending: 1994 </li></ul>
  18. 18. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Year Congress gave the Federal Reserve authority to address unfair mortgage lending: 1994 </li></ul><ul><li>Year the Fed finally proposed mortgage rules:  2008 </li></ul>
  19. 19. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Year Congress gave the Federal Reserve authority to address unfair mortgage lending: 1994 </li></ul><ul><li>Year the Fed finally proposed mortgage rules:  2008 </li></ul><ul><li>Fast action on abusive lending: Timeless </li></ul>
  20. 20. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Time Congress gave credit card issuers to comply with new Credit CARD Act rules: 12 months </li></ul>
  21. 21. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Time Congress gave credit card issuers to comply with new Credit CARD Act rules: 12 months </li></ul><ul><li>Number of new practices to increase fees & rates the issuers started during this period: 8 (and counting) </li></ul>
  22. 22. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Time Congress gave credit card issuers to comply with new Credit CARD Act rules: 12 months </li></ul><ul><li>Number of new practices to increase fees & rates the issuers started during this period: 8 (and counting) </li></ul><ul><li>Having companies live by—not outsmart—the rules: Timeless </li></ul>
  23. 23. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Number of federal regulators responsible for overseeing Countrywide Financial and Countrywide Bank: 3 </li></ul>
  24. 24. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Number of federal regulators responsible for overseeing Countrywide Financial and Countrywide Bank: 3 </li></ul><ul><li>Number of taxpayers who will foot the bill for Countrywide's losses:  138 million </li></ul>
  25. 25. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Number of federal regulators responsible for overseeing Countrywide Financial and Countrywide Bank: 3 </li></ul><ul><li>Number of taxpayers who will foot the bill for Countrywide's losses:  138 million </li></ul><ul><li>Cost to taxpayers: Pricey ($5 billion)  </li></ul>
  26. 26. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>IndyMac Bank financial “safety rating”* (99=best, 0=worst) </li></ul>
  27. 27. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>IndyMac Bank financial “safety rating”* (99=best, 0=worst) </li></ul><ul><li> 2006 - 55 2008 - 0 </li></ul><ul><li>*Source: Highline Financial bank analytics firm </li></ul>
  28. 28. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>IndyMac Bank financial “safety rating”* (99=best, 0=worst) </li></ul><ul><li> 2006 - 55 2008 - 0 </li></ul><ul><li>Regulator (OTS) response: Let IndyMac hide problems with fake financial statements </li></ul><ul><li>*Source: Highline Financial bank analytics firm </li></ul>
  29. 29. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>IndyMac Bank financial “safety rating”* (99=best, 0=worst) </li></ul><ul><li> 2006 - 55 2008 - 0 </li></ul><ul><li>Regulator (OTS) response: Let IndyMac hide problems with fake financial statements </li></ul><ul><li>Cost of IndyMac failure: $8.5 - $9.4 billion </li></ul><ul><li>*Source: Highline Financial bank analytics firm </li></ul>
  30. 30. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>IndyMac Bank financial “safety rating”* (99=best, 0=worst) </li></ul><ul><li> 2006 - 55 2008 - 0 </li></ul><ul><li>Regulator (OTS) response: Let IndyMac hide problems with fake financial statements </li></ul><ul><li>Cost of IndyMac failure: $8.5 - $9.4 billion </li></ul><ul><li>Regulators who actually enforce their rules: Priceless </li></ul><ul><li>*Source: Highline Financial bank analytics firm </li></ul>
  31. 31. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Year the OCC ruled that First Franklin Financial could ignore state lending laws: 2003 </li></ul>
  32. 32. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Year the OCC ruled that First Franklin Financial could ignore state lending laws: 2003 </li></ul><ul><li>Year that First Franklin appeared on the OCC’s “Worst 10” list of lenders producing foreclosures: 2009 </li></ul><ul><li>  </li></ul>
  33. 33. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Year the OCC ruled that First Franklin Financial could ignore state lending laws: 2003 </li></ul><ul><li>Year that First Franklin appeared on the OCC’s “Worst 10” list of lenders producing foreclosures: 2009 </li></ul><ul><li>  </li></ul><ul><li>Time for sensible banking oversight: Now </li></ul>
  34. 34. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Size of most banks disciplined by their regulator (OCC): Small </li></ul>
  35. 35. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Size of most banks disciplined by their regulator (OCC): Small </li></ul><ul><li>Size of OCC banks most often the subject of complaints: Big (80% related to 10 large banks) </li></ul>
  36. 36. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Size of most banks disciplined by their regulator (OCC): Small </li></ul><ul><li>Size of OCC banks most often the subject of complaints: Big (80% related to 10 large banks) </li></ul><ul><li>Need for sensible banking oversight: Huge </li></ul>
  37. 37. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>State efforts to address mortgage abuses (1992-2008): 9,000 </li></ul><ul><li>  </li></ul>
  38. 38. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>State efforts to address mortgage abuses (1992-2008): 9,000 </li></ul><ul><li>Federal Reserve actions during same period: 0 </li></ul><ul><li>  </li></ul>
  39. 39. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>State efforts to address mortgage abuses (1992-2008): 9,000 </li></ul><ul><li>Federal Reserve actions during same period: 0 </li></ul><ul><li>States’ ability to fix local problems quickly: Priceless </li></ul><ul><li>  </li></ul>
  40. 40. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Percent of mortgage loans exempted from state consumer protection laws by federal regulator (OCC): 43% </li></ul>
  41. 41. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Percent of mortgage loans exempted from state consumer protection laws by federal regulator (OCC): 43% </li></ul><ul><li>Increase in families going into foreclosure since 2006: 189% </li></ul>
  42. 42. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Percent of mortgage loans exempted from state consumer protection laws by federal regulator (OCC): 43% </li></ul><ul><li>Increase in families going into foreclosure since 2006: 189% </li></ul><ul><li>Need for homeowner protection: Climbing </li></ul>
  43. 43. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Number of foreclosures that must be prevented in 2010 to stabilize housing prices*: 3,200,000 </li></ul><ul><li>* Source: Credit Suisse </li></ul>
  44. 44. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Number of foreclosures that must be prevented in 2010 to stabilize housing prices*: 3,200,000 </li></ul><ul><li>Number of distressed mortgages that have received permanent fixes** through mortgage servicer voluntary efforts: 31,382 </li></ul><ul><li>* Source: Credit Suisse </li></ul><ul><li>** Through 12/10/09 </li></ul>
  45. 45. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Number of foreclosures that must be prevented in 2010 to stabilize housing prices*: 3,200,000 </li></ul><ul><li>Number of distressed mortgages that have received permanent fixes** through mortgage servicer voluntary efforts: 31,382 </li></ul><ul><li>Housing market recovery: Vital </li></ul><ul><li>* Source: Credit Suisse </li></ul><ul><li>** Through 12/10/09 </li></ul>
  46. 46. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Total U.S. budget deficit: $1.4 trillion* </li></ul><ul><li>*As of 10/30/09 </li></ul>
  47. 47. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Total U.S. budget deficit: $1.4 trillion* </li></ul><ul><li>U.S. lost home equity wealth due to nearby foreclosures (2009-2012): $1.9 trillion </li></ul><ul><li>*As of 10/30/09 </li></ul>
  48. 48. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>Total U.S. budget deficit: $1.4 trillion* </li></ul><ul><li>U.S. lost home equity wealth due to nearby foreclosures (2009-2012): $1.9 trillion </li></ul><ul><li>Economic recovery: Priceless </li></ul><ul><li>*As of 10/30/09 </li></ul>
  49. 49. Why U.S. families need an independent Consumer Financial Protection Agency <ul><li>For more info, visit www.responsiblelending.org </li></ul>

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