NerdWallet CEO: Americans need the CFPB now more than ever

With the stock market at record highs and unemployment near record lows, it might seem like Americans are living in an era of unprecedented prosperity. Yet millions of Americans are struggling to get by. They face stagnant wages, growing debt, and difficult financial choices. For them, the financial playing field feels like it’s tilted, and they’re running as fast as they can just to make ends meet.

Today, many Americans face considerable financial uncertainty. Wage growth has been stagnant for middle and low-income workers since the 1970s, even as productivity has spiked and corporate profits have soared. This is likely due to a combination of globalization, automation, and the shift toward part-time jobs. 

{mosads}At the same time, the average American household carrying credit card debt has a balance of $15,654 and pays nearly $1,000 in interest payments every year. Overall, rising consumer debt is a sign of confidence in the economy. But for those at the lowest rungs of the economic ladder, more debt creates more financial uncertainty. Simply put, millions of Americans need a helping hand on the road to financial security.

For the past seven years, the Consumer Financial Protection Bureau (CFPB) has played this vital role — serving as a referee between consumers and businesses. By the very nature of its structure, the CFPB has been largely insulated from political influence, and that’s why it’s been such an effective defender of consumers. As a member of the CFPB consumer advisory board, I believe that this core mission must continue.

Since its founding in 2011, the CFPB has returned more than $12 billion to consumers. It has handled more than 1 million consumer complaints, established consumer-friendly mortgage rules, and taken a strong stand against predatory lenders who trap consumers in disastrous cycles of debt. 

And the bureau has been at the forefront of financial literacy efforts, educating consumers about products and services and how to take control of their own financial futures.

Now, at a moment of political transition, some are looking to dismantle the CFPB. They argue that the bureau has imposed too many burdensome rules on financial institutions.

The truth is that Americans are in desperate need of assistance. The rapid transition to a globalized economy has dampened wages and limited opportunities for working families. Compounding this, few Americans can afford high-priced advisors to navigate the intricacies of interest rates, the stock market or tax reform. As a result, many consumers find themselves in financial distress after signing up for financial products with high fees and interest rates or falling prey to unscrupulous lenders. 

The good news is that there are significant changes taking place in the marketplace to help consumers at every rung of the economic ladder. Innovation in financial services is providing consumers new financial tools to help them navigate the dizzying array of choices — by providing objective advice in plain language, enhancing the loan and credit card selection experience through comparison shopping, and creating apps and other tools that allow people to find new ways to access credit and manage their finances at the touch of a screen. 

But this is not enough. Our government must serve as a critical backstop to ensure that consumers are not being taken advantage of. That’s why I believe the CFPB must continue its core mission of protecting consumers, simplifying choices and helping Americans achieve financial freedom.

Tim Chen is CEO of NerdWallet, which offers financial tools and objective advice to help people understand financial products and make the most informed decisions. Chen also sits on the Consumer Advisory Board of the Consumer Financial Protection Bureau.