Bess: Spat over the Consumer Financial Protection Bureau politicizes the public good (column)
November 28, 2017
As Congress struggles to enact legislation that will bring tax relief to the rich and decimate health care for the not-so-rich, another battle is brewing beneath the swamp — the never-ending struggle to decimate the lusterless policies that affect the lives of ordinary Americans. Policies put in place to protect us no matter what our political persuasion may be.
The tussle over who will wrest control over the Consumer Financial Protection Bureau (CFPB) is the latest move by the administration to gut any regulatory body designed to ensure that "the 99 percent" of us are not taken advantage of, or endangered by financial institutions.
The CFPB is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act and was designed to avoid the financial calamities that occurred in the wake of the stock market collapse of 2008. The same Wall Street that then-candidate Trump railed against during the 2016 presidential campaign; swamp-dwellers the president promised to rid the American public of and has, yet, failed to do.
The collapse that precipitated Dodd-Frank has been variously attributed to complex investment schemes by banks "too big to fail," as well as lack of regulatory oversight. The law was enacted to avert practices on Wall Street that nearly led to the collapse of international financial markets. And the CFPB has been doing its job.
Since its inception six years ago, the agency has safeguarded Americans from financial harm. It's followed up on nearly two million consumer complaints and has returned almost $12 billion in refunds and cancelled debts. It has helped nearly 30 million Americans through its enforcement actions. Earlier this year, the CFPB assessed penalties totaling $100 million against Wells Fargo Bank for its toxic lending practices and fraudulent activities, which included the systemic opening of unauthorized deposit and credit card accounts.
The CFPB has put into place regulations to stop payday loan companies from trapping consumers in a web of never-ending debt through rollover fees, automatic debits from borrowers' bank accounts, balloon payments, and entering loans which borrowers cannot possibly pay back without loss of property or missing other financial obligations. Like paying rent. Or eating. Or medical care. Seems like a good thing.
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Because Dodd-Frank was written in large part by former Rep. Barney Frank, and the CFPB was essentially created by Sen. Elizabeth Warren, two avowed liberals, the agency's mere existence has been anathema to Republican lawmakers, who believe the agency wields too much power and mires lenders in too much red tape. This opinion has some degree of credence.
Dodd-Frank has made the lending process for both consumers and businesses far more stringent; getting a loan isn't as easy as it was in the pre-2008 days. Community banks often find themselves subject to the same standards as larger institutions, rules that often require considerable time and personnel to remain in compliance with federal regulations. Republican lawmakers also claim there is not enough oversight of the CFPB.
Dodd-Frank also includes a stipulation that the CFPB's deputy director would take over should the agency's director leave their post; becoming acting director in the process. The battle being waged in Washington right now is over who the real acting director is: former deputy director Leandra English, a career regulator, who stepped into the post last Friday; or the president's appointee, budget director Mick Mulvaney, who famously labeled the CFPB a "sad, sick joke."
The case of the dueling directors will now be decided in court. It will be determined whether Dodd-Frank's rule of succession stands or whether the 1998 Federal Vacancies Reform Act that the administration is invoking is more applicable. One of the judges reviewing the matter is an appointee of President Trump. Hopefully, the rule of law will prevail; not the politicization of the public good.
Though Mr. Mulvaney may think so, consumer protection is anything but a laughing matter. On that, most Americans would agree.
Blair Bess is a Los Angeles-based television writer, producer and columnist. He edits the online blog SoAggragated.com, and can be reached at BBess.firstname.lastname@example.org.
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