Treasury Notes

 When Partisan Obstruction Goes Too Far

By: Anthony Coley
11/2/2011

For years, we have been hearing unfortunate stories from men and women in uniform being taken advantage of by predatory lenders. The Los Angeles Times today published a compelling article reminding us of this recurring problem, which is not just confined to predatory lenders or Buy Here Pay Here store fronts. A few weeks ago, Holly Petraeus, head of Servicemember Affairs for the new Consumer Financial Protection Bureau (CFPB), shined the light on another issue:  for-profit colleges using unsavory marketing practices to target military personnel:    

Wrote Petraeus:  

Military personnel and their families are finding themselves under siege from for-profit colleges. A number of these schools focus on members of the armed forces with aggressive and often misleading marketing, and then provide little academic, administrative or counseling support once the students are enrolled. Vast sums are involved: between 2006 and 2010, the money received in military education benefits by just 20 for-profit companies soared to an estimated $521.2 million from $66.6 million.

In order to prevent unfair, abusive,  or deceptive financial practices, President Obama last year signed the Wall Street Reform and Consumer Protection Act, which established a single agency, CFPB, to help protect and educate consumers.  

CFPB receives its full authority to investigate the practices of non-bank consumer lenders, including private student lenders, in order to prevent predatory practices when its first director is in place. The President nominated Rich Cordray, a former Ohio Attorney General who has been endorsed by Republicans and Democrats alike, to head up the new agency. Unfortunately, Senate Republicans are using partisan delay tactics to prevent Cordray from even receiving an up or down confirmation vote. In the meantime, American consumers, including the men and women of our armed forces, continue to be targets for exploitation while CFPB’s powers are hampered by the refusal to allow the nomination to proceed.

Tomorrow, Petraeus will testify before the Senate Banking Committee about the CFPB’s work to protect and empower members of the military, veterans and their families in the financial marketplace.  Petraeus and her team have demonstrated strong commitment to do what they can with the tools they have. 

As we approach Veterans Day, I can think of no better way to show how much we appreciate our men and women in uniform than to fully protect them and their families from unfair, abusive, or deceptive financial practices. By simply allowing an up or down vote on Pres. Obama's nominee to lead the CFPB, Senate Republicans can make that happen today.

Anthony Coley is Deputy Assistant Secretary for Public Affairs.

Posted in:  Wall Street Reform, Consumer Financial Protection Bureau
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