CFPB workers announce Coronavirus Action Plan for the economic crisis

Director Kathy Kraninger asked for employees’ ideas for the CFPB’s response to coronavirus. As the representative of the employees, CFPB Union members surveyed the bargaining unit and wrote this plan for how CFPB and the Director can use the Bureau's power to provide financial relief to Americans.

NTEU members are encouraged that CFPB has already taken some of the actions we recommend, including launching a resource on mortgage and housing assistance during the national emergency. Our plan goes further with policies that CFPB can enact that would benefit our communities, ideas for how the Director can use her platform to make sure banks protect consumers and provide relief from financial hardship during the pandemic, and how we can best contribute to protecting consumers in our work during this crisis.

In short, we recommend that CFPB and Director Kraninger:

1. Push for direct, unconditional relief to consumers.

2. Resist deregulation and remain vigilant. Monitor the market for COVID-19-related scams & shady behavior.

3. Enhance consumer education & response. Be THE central unbiased, comprehensive, accessible source for Americans suffering financial problems during the pandemic.

Our full recommendations for how CFPB must respond to this crisis:

1. Push for direct, unconditional relief to consumers.

1. 1. Coordinate government relief: Coordinate with state and federal regulators to remain up-to-date on the various government relief options that may be available to consumers. Monitor and discuss government relief with other federal agencies and state partners to ensure that stimulus payments reach constituents without conditions. 
   2. Press financial institutions to provide relief to consumers: The Bureau has already provided for various forms of regulatory relief to industry. Industry has committed to financial relief in various forms in different states. It is time now to push financial institutions to provide relief to consumers nationwide, including, but not limited to, the following: 
      1. Define COVID-19 related benefits, including stimulus payments and other consumer relief, as government benefits that are shielded from debt collectors and other creditors. (Examples: Oregon, Law 360 article on how shielding stimulus checks from collection could help banks)
      2. Waiver of fees on deposit accounts including fees for insufficient funds, overdraft fees, maintenance fees, wire transfer fees, and any other fees that particularly hurt low- and moderate-income consumers. (Example: California)
      3. Interest rate caps on payday and small-dollar loans for all consumers (Example: UK).
      4. Widespread forbearance on consumer loans, freeze interest collection during forbearance, and extend loan terms so that balloon payment is not due at the end of forbearance period. (Examples: California, UK, Canada)
      5. Moratorium on severe collection tactics like repossessions and foreclosures for consumers, and debt collectors and creditors collecting debt should be allowed to contact consumers in writing only and should be prohibited from engaging in harassment. (Examples: California; Delaware; UK)
      6. No negative credit reporting for a period of time.
      7. Provide relief without requiring additional administrative burdens. 

2. Resist deregulation and remain vigilant. Monitor the market for COVID-19-related scams & shady behavior.

1. 1. Perform special examinations and data collection to identify problems proactively. 
      1. Targeted exams to protect consumers during the pandemic, including, for example: 
      2. ensuring that loan servicers offering forbearance are providing timely and accurate information to consumers; 
      3. ensuring financial institutions are appropriately processing and handling the distribution of government-sponsored funds. 
      4. Increase data collection from credit reporting agencies and large banks regarding, for example, the number of consumers who have defaulted on loans or how consumer lending has changed since the start of the pandemic. Publish reports to help tell the story of how the pandemic is impacting people.
      5. Increase interagency coordination among the federal and state regulators with respect to complaint handling to track emerging issues.
   2. Warn industry and deter bad behavior. 
      1. Utilize warning letters to deter harmful behavior, and follow-up with enforcement investigations. 
      2. Use authority to declare harmful practices unfair or abusive. Inform industry that, depending on the facts and circumstances, enforcement of otherwise-normal contractual terms (e.g., penalty fees, negative credit reporting, repossession/eviction/foreclosure), may be deemed unfair or abusive in this environment. 
   3. Resist deregulation. 
      1. Do not shortcut “innovation policy” procedures that may open floodgates for risky credit products. 
      2. Do not relax fair lending reporting rules again. 
      3. Do not relax supervision and oversight. We commend Director Kranger’s commitment to continue supervisory examinations during this time.
   4. Encourage good behavior. 
      1. Advertise the whistleblower hotline extensively. 
      2. Encourage institutions to self-report COVID-19-related issues to the Bureau.

3. Enhance consumer education & response. Be THE central unbiased, comprehensive, accessible source for Americans suffering financial problems during the pandemic.

1. Launch CFPB advertising blitz to reach a mass audience and underserved communities. 
   1. Adding information and resources on the CFPB website is not enough, as the vast majority of consumers do not know how to go to the CFPB website for information, and not all consumers have ready access to the internet. 
   2. Advertisements describing the resources on the CFPB website, as well as advertise the Consumer Complaint phone number for submitting complaints should be widespread including: (1) television; (2) streaming services (e.g., Netflix, Hulu, Amazon Prime); (3) radio; (4) podcasts; (5) social media (e.g., Facebook, Twitter, Instagram) 
   3. All consumer education and consumer response resources must be made available in a variety of formats (e.g., audio & visual) and in multiple languages to reach the largest number of consumers. 
2. Consumer education resources should empower consumers to understand the following topics: 
   1. Provide information on topics of interest to consumers, including direct stimulus payments, unemployment benefits and other relief available, as well as information on how consumers can obtain that relief, and how to avoid unnecessary fees to obtain relief payments. CFPB should allow a consumer to look-up their address or zip code and learn what relief is available in their area, including links to resources and relief provided by other federal, state and local government agencies.
   2. Mortgage and housing assistance, including guidance on mortgage forbearance. [UPDATE: On 5/12/20 CFPB met this recommendation and launched a resource on Mortgage and housing assistance during the coronavirus national emergency.]
   3. Student loan relief options. 
   4. Avoiding the debt trap of short-term, small-dollar loans with high interest rates. 
3. Substantially increase the size of CFPB staff and/or contract resources necessary to handle any uptick in consumer complaints or inquiries, and provide call center support to consumers seeking relief. CFPB should require contracting firms hired for these services to provide safe working conditions and paid leave to their staff.