By Mike Lux, Heather Booth, and Bob Creamer
With Donald Trump in the White House and Mitch McConnell as Senate Majority Leader, Americans are understandably discouraged about how dysfunctional and toxic the federal government is. But it wasn’t very long ago that one woman, along with a big coalition of progressive groups and activists that she helped inspire, rattled the cages of the powers that be and won a major victory that improved tens of millions of people's lives.
That woman, as you might know if you have been following this year’s presidential campaign, is Elizabeth Warren. The victory was the creation of the Consumer Financial Protection Bureau (CFPB). The CFPB was Warren’s brainchild and baby in every way. She came up with the idea, advocated for it with lawmakers, convinced President Obama to support and fight for it, refused to back down when powerful lawmakers asked her to accept changes to weaken it, and brought the agency to life inside the Obama administration after it was passed into law.
But what you probably don’t know is how monumentally difficult it was to get CFPB passed, and what an enormous difference it has made in our economy and in the lives of bank consumers everywhere. We were among the activists who worked with Senator Warren to make a strong CFPB a reality, and we know how fraught this battle was and continues to be.
Elizabeth will sometimes talk about how nobody in DC thought she could get the CFPB passed, but she underplays just how tough it was to get this measure enacted. The pro-financial reform community is estimated to have been outspent by Wall Street banks in lobbying and PR by more than 500-1. Powerful legislators, including a chair of a major committee, repeatedly asked Elizabeth to back down. Even though President Obama was for the CFPB, administration officials in Treasury and on the White House economic team undermined the idea of having CFPB in the final bill. In the final showdown, when pushed one more time to accept a much weaker version, Elizabeth told top legislators that a strong, independent agency was her first choice and that “My second choice is no agency at all and plenty of blood and teeth left on the floor.”
In the end, because Elizabeth had made herself such an iconic leader on financial reform to millions of Americans, and because the coalition backing her up- Americans for Financial Reform, which Heather Booth directed) had done such a great job of organizing and driving the debate, legislators decided they would rather incur the wrath of Wall Street than the wrath of Warren and her allies: CFPB became the law of the land. After that, President Obama asked Elizabeth to serve as a Special Assistant to him and to the Treasury Secretary to help get the agency started, and because of her the CFPB hit the ground running.
The creation of the CFPB was a very big deal. In terms of the real life policy impacts on people’s lives, CFPB has developed a series of regulations that have literally kept banks from cheating people on their mortgages, loans, and other financial issues. It was CFPB that led the investigation into the vast level of fraud that Wells Fargo was perpetuating on at least 3.5 million customers by creating fake accounts in their names, an investigation that not only compelled the bank to pay back over $100 million dollars, but also forced them and every other major bank to create tough new safeguards against customer fraud. CFPB has taken enforcement actions that have so far succeeded in getting the likes of Bank of America and Chase Bank to end their rip-off practices and delivered nearly $12 billion in restitution to more than 29 million cheated consumers. The agency has proposed rules to sharply limit payday lending abuses and forced arbitration clauses with class-action bans that operate as “Get out of jail free” cards for big banks and lenders that break the law. It has created a searchable public complaint system and database to help consumers get answers from companies and usable information to protect themselves, and is doing research to help the public and policy makers understand what is happening in financial markets.
This is policy with major real world consequences for tens of millions of people that have been helped directly, but beyond that, the CFPB has fundamentally altered the way the big Wall Street banks treat formerly powerless people in the marketplace. It is no surprise that the Trump administration has worked so hard to destroy the power of the CFPB, siding with Wall Street at every turn to weaken the agency and turn its pro-consumer policies on their head. The good news is that the agency is still there. When a progressive President like Elizabeth comes into power, CFPB can start helping consumers with renewed vigor.
In terms of political dynamics, the impact of CFPB’s passage has been even more dramatic, proving how important it is to fight big policy battles with the most powerful and well-financed foes: because you just might win, and win big changes that make a difference in huge numbers of lives. It has proven that our government, when in the right kind of hands, is capable of doing the right thing even in the face of the overwhelming lobbying and PR power of one of the most powerful industries in America. It’s a model for how the next President and next Congress elected in 2020 can do ambitious and serious things to deliver for the American people. As Elizabeth has said, the lesson of CFPB is that “you may not win every fight you take on, but you only win if you do take on the fight.”
And here’s the most amazing thing of all: Elizabeth led this winning, against-all-odds fight when she was a private citizen. Her leadership style was to develop and present a great idea; build an alliance with talented organizers and groups and help them drive the idea forward with the power of organizing and coalition building; sell the idea relentlessly in the media and with DC insiders; and never back down when told to give up, no matter who was telling her to do so. She was not yet in the Senate; she had nothing but the brilliance of her idea, the clarity of her voice, and the coalition of her allies to take on the incredible wealth and power of Wall Street. Yet she won what was arguably the most surprising uphill victory of the last 20 years.
Imagine what she could do if she were President.