U.S. official urges consumer activism

INDIANAPOLIS -- Vigilant consumers are sometimes more effective in putting an end to lenders' bad practices than government agencies, a top federal watchdog said Friday.

Richard Cordray, director of the U.S. Consumer Financial Protection Bureau, said credit-card users, individual investors and homeowners and college students with outstanding loans underestimate their power to change industry practices, such as exorbitant banking fees. Collective action by consumers, he said, often garners a quicker response from banks and other financial institutions than lawsuits or fines by government.

"We think voting with your feet is an important thing for consumers to do when they're dissatisfied," he told a meeting of business journalists here. "In many cases protecting themselves is the most effective way that we can police this marketplace. That means speaking up, it means banding together and having your voices heard. . . . There has to be power on both sides of the transaction, and consumers have power and they need to recognize that."

Cordray, a former Ohio attorney general, was appointed Jan. 4 by President Barack Obama while Congress was in recess. Senate Republicans opposed to the protection bureau had blocked his confirmation."The fact that we were hamstrung for awhile . . . was unfortunate but it is behind us," he said Friday, referring to his thwarted confirmation.

He outlined plans to boost consumer protections in home mortgages, student loans and credit cards. He urged consumers to file complaints to the bureau's website, www.consumerfinance.gov, where advice on college lending also can be found.

The bureau, funded by the Federal Reserve System, has more than 800 employees.