A federal consumer watchdog’s work pause has sparked concerns in Minnesota, with lawmakers worried about the potential impacts on state residents. The Consumer Financial Protection Bureau (CFPB) was created after the 2008 Great Recession to protect consumers from corporate fraud and scams.
As the Trump administration seeks to revamp the government, some lawmakers fear that scaling back or shutting down the CFPB would leave consumers without adequate protection. Minnesota’s commerce department relies on the CFPB for complaints about federally regulated institutions like banks and credit card companies, as it lacks jurisdiction over these areas.
Residents shared their concerns, citing issues with student loan borrowers and rental market fairness. Jacob Richter, a University of Minnesota student, expressed worry about the lack of protection for consumer groups, including his own experiences with loan servicer Mohela.
Minnesota lawmakers have submitted 17,000 complaints to the CFPB in the last year alone. While the state can pass laws protecting consumers, existing staff dedicated to these issues are under-resourced compared to the federal agency. Critics argue that the CFPB is redundant and should not exist as a separate entity.
Despite this, the CFPB has recovered $20 billion for consumers since its inception by reducing loan balances or wiping out debts. Lawmakers emphasize the importance of protecting Minnesotans’ interests if the CFPB’s role becomes uncertain.
Source: https://www.cbsnews.com/minnesota/news/minnesota-lawmakers-impacts-cfpb