Congressman Barney Frank today praised the announcement by the Consumer Financial Protection Bureau that it has taken an enforcement action against three subsidiaries of American Express. The companies will refund 250,000 customers a total of approximately $85 million dollars and will pay an additional $27.5 million in civil penalties.
The enforcement action was taken jointly with three federal bank regulators -- the Federal Deposit Insurance Corporation, the Federal Reserve, and the Office of the Comptroller of the Currency, as well as with the Utah Department of Financial Institutions. The regulators found that at various times between 2003 and 2010, the companies had deceived consumers about the benefits of signing up for the American Express "Blue Sky" credit card, discriminated against applicants on the basis of age, charged unlawful late fees, and engaged in other illegal practices.
Congressman Frank made the following statement about the enforcement action:
I welcome this latest example of the importance of an independent Consumer Financial Protection Bureau in order to defend the rights of American consumers.
I'm particularly pleased that the CFPB is acting here in cooperation between other Federal regulators and with the administration of a state government that can hardly be accused of an anti-free enterprise bias. This is further refutation of the attacks that have been made on the notion of an independent consumer bureau and an example of how it provides significant benefits to citizens without in any way jeopardizing the legitimate needs of the financial system.
The Consumer Financial Protection Bureau was established by the 2010 Wall Street Reform and Consumer Financial Protection Act. The law was passed with overwhelming support from Congressional Democrats and over the almost unanimous opposition of Republicans. Key Republican leaders have vowed to repeal the Wall Street Reform Act if they win majorities in both Houses.