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. 

As I noted, we have seen this happen before—in the financial crisis of 2008 that broke the economy and disrupted so many families and communities. Back then, it was the mortgage market meltdown, rather than a pandemic, that radiated pain throughout the country. Millions of people lost their jobs, millions lost their homes, and everyone lost much of their retirement savings. But the dire consequences today are eerily similar, except that this time the economy has cratered much faster. We are now in a consumer crisis—the third wave of the COVID-19 crisis—and we urgently need to take action to minimize the pain and misery for so many Americans.

Three overall objectives demand our immediate attention.

• Diagnose the Evolving Consumer Harm. Public officials need to be assembling a detailed picture of what is going on and understanding what people need in this time of crisis. We can’t expect our public health authorities to resolve the pandemic without adequate testing to see who has the disease. By the same token, we cannot effectively address the economic harm to most households without diagnosing the problems people are facing. Most people have little or no savings cushion and are already in trouble. Consumer stories are valuable to show what is actually happening on the ground—as opposed to what officials may assume or intend—and any sources of real-time data, such as new unemployment claims or missed mortgage or rent payments will point the way to the relief that is needed. Whatever information is gathered should be made publicly available for everyone to study and analyze. And by focusing on categories of consumers—such as seniors, students, servicemembers, rural communities, and new Americans—we can discern patterns that might call for special forms of relief. All of this data can play a crucial role in guiding our response to the consumer crisis.

• Adopt Strong Measures to Address the Harm. America is facing circumstances akin to a natural disaster of nationwide scope. The president, most governors, and even many mayors have issued declarations of emergency. This enables them to invoke extraordinary powers to use all means at their disposal to address the crisis—which, again, is now both a health crisis and an economic crisis. It is not normal to shutter businesses, or to order people to shelter in their homes, on pain of arrest for violations. But it is happening almost everywhere amidst this crisis. By the same token, as consumers face financial ruin, strong measures to protect them are amply justified. Congress and the states are working overtime to get money to people as quickly as possible, whether by stimulus checks or unemployment benefits. They must also issue far-reaching orders to provide temporary safeguards against foreclosure or eviction that can keep families in their homes. The orders must be broad and straightforward, so the relief does not get bogged down in the tangled details of different mortgage instruments or tie people up in complex processes with mounds of self-defeating red tape. And people need protection against debt collectors who are poised to repossess their vehicles, garnish their wages or even their federal stimulus checks, or otherwise obstruct the last-ditch measures that provide a critical lifeline for people who cannot now meet their financial obligations through no fault of their own.

• Insist on Close Oversight of Follow-Through. It is one thing to adopt tough and far-reaching measures. But it is quite another to make sure those measures deliver the intended results. Congress has passed payment deferrals for homeowners that cover about half of all mortgages. But what about the other half? And how can we be sure that financial companies are carrying out their duty to provide the mandated relief? It is not enough to exhort companies to “do the right thing” or just to assume that they will follow new and unfamiliar laws that are not part of their normal processes. We need our cops on the beat to monitor them and make utterly certain that they are doing what they are required to do right now. If that doesn’t happen, millions of consumers, their families, and our country will suffer dearly.

New initiatives are springing up at the federal, state, and local level to help people dealing with loan delinquencies and defaults, not only with respect to housing but also across the entire spectrum of consumer credit. These initiatives must be simple and easy to access; too much complexity causes the whole program to fizzle, as occurred all too often a decade ago. But the rapid pace of events can be taxing even for large financial companies; it will be far more confusing for ordinary people who cannot follow a maze of new federal laws and regulations. Government officials will need to lay out reliable guidance in accessible language to help people navigate these unfamiliar programs. The more clearly people can understand their rights, the more likely they are to receive the intended assistance and support.

We are seeing many heroes emerge around us every day. But we also see the worst of the worst surfacing at the same time. Scam artists and fraudulent operators are busy developing illegal schemes aimed at taking money out of people’s pockets just when they need every penny. The predators are deceiving people over the phone and through the mail, and they are building fake websites to fool people into parting with sensitive financial information. The government must be aggressive in identifying and harshly prosecuting such exploitation, in order to punish wrongdoers and discourage imitators.

We learned from the last financial crisis that we must make sure that essential help flows through to Main Street, not just to big banks and large corporations. That will help small businesses survive and will bolster families whose lives are upended by the economic dislocation. Addressing the essential needs of consumers strengthens our economy from the ground up. If it is not done well, our communities will suffer for years to come. The resentment and alienation will be natural and inevitable, souring our politics as well.

The Consumer Financial Protection Bureau was established in 2010 with a singular focus to look out for consumers. For its first six years it did just that, setting new mortgage rules to safeguard that market against a future crisis, pursuing financial predators, and returning $12 billion to over 30 million consumers. Its success shows how much of a difference it makes when our government is working effectively for middle-class families. But the new leadership of the CFPB has been tentative in this crisis, relaxing standards for financial companies and leaving consumers to bear the brunt if the companies don’t perform well. Now is not a time to pull back; instead it is a moment for urgent action to stand up for consumers just when they need it the most. The CFPB, and all federal and state leaders, must buckle down by putting consumers first.

Richard Cordray was the first director of the Consumer Financial Protection Bureau. His new book Watchdog discusses the importance of the work the CFPB must do to protect Americans.