Milestones: A consumer cop hits the financial beat

In the wake of the crash, reform

It was late 2008. Reckless practices on Wall Street, neglected by the government, had brought the economy to its knees.

Home values plunged. Retirement savings evaporated. Americans lost nearly $10 trillion in total.

PIRG’s Ed Mierzwinski and Gary Kalman pressed for major Wall Street reform. They helped unite consumer advocates, labor groups and others around the goal of protecting consumers from the too-often careless or unscrupulous practices of banks, credit card companies, debt collectors and other financial players. The new coalition, Americans for Financial Reform, was headed by PIRG alumna Heather Booth.

“This is a David and Goliath fight,” said Heather, in The Los Angeles Times. “On the one side, you have the extraordinarily powerful financial industry and the Chamber of Commerce…. And on the other side, you have the people.”

Elizabeth Warren, then a Harvard professor appointed by President Barack Obama to head the Troubled Asset Relief Program Oversight Board, proposed a solution: the creation of an independent watchdog to check Wall Street.

Along with AARP and other allies, Ed and Gary met with Professor Warren (whom later, of course, Massachusetts voters elected to the U.S. Senate), Rep. Barney Frank (Mass.) and Sen. Chris Dodd (Conn.) to help turn Warren’s brainchild into the Consumer Financial Protection Bureau.

In December 2009, Rep. Frank introduced the Wall Street Reform and Consumer Protection Act. As Heather Booth predicted, Goliath came out swinging: The financial industry would ultimately spend $500 million in opposition, or roughly 166 times the amount the bill’s supporters would scrape together.

After a special election, a grassroots campaign 

Still, the bill’s prospects looked promising — until Scott Brown, a Wall Street reform skeptic, won a 2010 special election to fill the vacant seat of U.S. Sen. Ted Kennedy, who had passed away in August 2009.

To persuade Sen. Brown to become a “yes” vote, MASSPIRG launched a grassroots campaign. Ultimately, he agreed to support an amended version of the bill, opening the door to other Republican hold-outs.

President Obama signed the bill into law on July 21, 2010, and appointed Richard Cordray as the CFPB’s first director in January 2012.

Defending Wall Street’s consumer cop 

By Jan. 1, 2017, the CFPB had provided nearly $12 billion to 29 million consumers in the form of compensation, reductions, canceled debt and other relief.

Just weeks later, however, the Trump administration launched an effort to weaken the CFPB.

That same year, PIRG canvassers organized tens of thousands of people to urge their senators to oppose the Financial CHOICE Act, which would have undermined the agency. PIRG advocates coordinated press conferences with local groups and elected officials, defending the bureau in the media.

In 2018, President Donald Trump signed legislation rolling back some Wall Street Reform protections. But the CFPB was spared. As a New York Times columnist had predicted a year earlier, “The [bureau] seems too popular to simply shut down.”

The bureau’s popularity was and is due in part to its accessibility, exemplified by its publicly-searchable Consumer Complaint database (a database that PIRG successfully fought to keep public during the Trump administration). PIRG advocates call it the “canary in the coalmine” for threats to consumers. Bureau staffers take consumer complaints on nearly any financial issue online, over the phone or in writing. They then get to work recovering money, eliminating false credit bureau information and debt collection claims and stopping discriminatory practices.

PIRG has played a key role in that process by analyzing the database to find patterns and call attention to pervasive consumer problems. From costly mistakes on credit report to airlines refusing to refund flights during the pandemic, every day Americans are dealing with the same financial frustrations. PIRG’s exposés on how widespread these problems really are has helped drive government officials to find solutions.

About this series: PIRG and The Public Interest Network have achieved much more than we can cover on this page. You can find more milestones of our work on financial protection below. You can also explore an interactive timeline featuring more of our network’s financial protection milestones.