Twelve years ago, we faced a major financial crisis that hurt consumers terribly. Unemployment spiked above 10 percent for the first time in many years. People were preyed upon by irresponsible mortgage loans with misleading teaser rates, exotic terms that made them hard to pay back, and inflated interest rates covering kickbacks that lenders and brokers often split between them. Money sent to consumers to help them get back on their feet was sometimes diverted by fraudsters and scammers who made false claims to steal the money or get access to people’s sensitive financial information. I was put in charge of a new federal agency, the Consumer Financial Protection Bureau, with the job of shielding people and their families from these kinds of financial harm.
Now we are facing a new crisis in our economy and our society. The coronavirus pandemic is overwhelming our communities. Most urgent is the health crisis itself, which requires testing people and treating the virus that threatens our lives. To slow its spread, emergency declarations and stay-in-place orders have upended life as we know it. These extraordinary measures, needed to deal with the pandemic, have led to an abrupt halt in much economic activity, shuttering businesses and causing mass layoffs. Keeping small businesses afloat and making crucial financing available to bridge the deepening canyon in our economy is requiring heroic efforts, and the results are not yet clear.
But the third wave of the COVID-19 crisis has now arrived, with its own ravaging effects on our daily lives. For millions of workers who have lost their jobs or seen their hours cut back drastically, the money is not coming in fast enough to cover the bills. People who were coping or even thriving in a strong economy just a month ago are now unable to pay the rent or make their mortgage payment. They are quickly falling behind on auto loans, utilities, and credit card bills.