Regulation

CFPB Director Cordray: Agency working to understand financial challenges

Richard Cordray

Richard Cordray

CFPB Director Richard Cordray said on Thursday at The National Baptist Convention in North Carolina that the agency is working to understand the financial challenges Americans face.

“[The agency] know[s] that consumers have to climb the ladder themselves – we cannot step into their shoes and do it for them,” Cordray said. “But what we can do, and must do, is hold the ladder steady. We can help empower Americans to make sound financial decisions they can live with for the rest of their lives. And we can make sure they are not forced down the ladder by what we call the ‘Four Ds’: deceptive marketing, debt traps, dead ends and discrimination.”

The agency launched its Know Before You Owe campaign as part of an effort to make financial information more understandable for consumers. Cordray said eliminating deception in the marketplace “requires tough action,” adding that the agency has started cracking down on deceptive credit card companies.

The CFPB has also worked to combat debt traps, which are products marketed as short-term solutions to immediate needs. The products, however, can cause consumers “to get stuck in a downward spiral that deeply undermines their personal finances.”

Additionally, Cordray said the CFPB is working to address “dead ends”—markets in which consumers have no choice over the companies they work with, leaving them with little control over their ability to cut ties with a particular firm.

Cordray also pointed to the “continuing evil” of discrimination in the financial marketplace, pointing to hidden incentives for brokers to negotiate higher rates that resulted in many minority borrowers paying more than they should have for loans.

“In all of these financial matters, nobody cares as much about you as you care about yourself,” Cordray said. “Nobody understands your needs and wants, your hopes and dreams, as well as you understand them yourself. So everyone must recognize that I am my own first line of consumer protection… We all need to know more. We owe that duty to ourselves, to clear a lasting path forward in our lives. If we do that, we will make ourselves stronger, our families stronger, and our country stronger.”

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