Inspired by last night's post, a regular reader pointed me to last Friday's post by Tom Brown, who was off to the races over two recent utterances by high-level CFPB officials. The post's title, "The Beginnings of Overreach at the CFPB. Whatever happened to personal responsibility?" gives you a clue that he and I (and Marvin Umholtz) are singing from the same songbook.
The first object of Tom's ire was Stacy Canan, deputy assistant director of the CFPB’s Office for Older Americans, who stated in an NPR interview that “There absolutely are some financial advisors that are using the designations just for marketing purposes...and they don’t really have the substantive expertise and training to back up what that designation implies to investors,” and "Seniors deserve the right to understand whether they’re entrusting their life savings to someone who’s only had a weekend seminar versus spent months or even years of training to learn how to give adequate financial advice.”
Canan's solution is that the CFPB should become involved in establishing standards for the accreditation of financial advisers. This drove Tom to a fits of sublime snark.
Seniors can ask. “What does it take to become a Chartered Retirement Planner anyway?,” they might say. Or “What’s does becoming a Certified Investment Advisor involve?,” would be another good one. Now that I think of it, a prospective client might have other questions as well, such as about the planner’s prior experience and educational background. She might also ask for references. Back in the days before the CFPB, this sort of preparation was referred to as “common sense,” and Americans were actually pretty good at using it.
Canan made another pronouncement that I had to read twice to make certain that she said what I thought she said. “Seniors in particular often mistakenly believe that their financial advisor is looking out for their best interest. That is rarely true.” Tom's response to that wholesale slander of an entire profession was pithy.
Really? Advisors only rarely look out for their clients’ best interest? One wonders how they’ve managed to stay in business. Canan seems to believe that the investment advisory business is simply systematic, organized thievery. Worse, she seems to think consumers are too stupid to recognize that. But not to worry! She’s from the federal government and is here to help. I’ve got a better idea. How about we assume that consumers are capable of taking personal responsibility for their decisions, and can be expected to make the right ones? Decisions related to one’s finances are among the most personal an individual can make. It’s outrageous that a government agency, the CFPB, is scheming to get involved in them.
Apparently, we have folks at the highest levels of this agency whose regulatory bona fides isn't sullied with the grime of actually having any first-hand knowledge of the businesses they currently regulate and seek to regulate. If ignorance is bliss, they're perpetually orgasmic. Moreover, the desire to infantilize entire segments of the American populace and require them to look to the CFPB as their paternal (or matriarchal) protector is palpable.
Tom also takes off on the recent pronouncements by the CFPB on student lending, especially that the solution to the student loan crisis is for lenders to forgive and/or modify indebtedness and to extend more of it to students who don't pay it back. Throwing good money after bad appears to be a dead end to those of us with a actual lending experience. As another of my readers put it in an email to me, "I don't even know where to start with this bad idea." On the other I do know where to start: with the trash can.
In the end, he articulates well a frustration that many of us feel.
The people who run the CFPB seem to have the basic view that under no circumstances should people have to live with the consequences of their own freely made decisions or bear their own personal responsibility. Instead, the government should always be able to intrude itself in people’s lives to “fix” things. The trouble with allowing the government to insert itself into every part of your life is that, well, the government is going to end up inserting itself into every part of your life. There’s a word for that: tyranny. The CFPB tries to portray itself as a paternalistic entity that’s only trying to help people. In fact, it’s bureaucratic monstrosity, funded directly by the Fed, that is accountable to exactly nobody. The ideas that people at the CFPB come up with sound benign enough now. But as they accumulate (and they will, trust me) they’ll seem arbitrary, intrusive, and ubiquitous—and, of course, expensive.. But by then it will be too late. The time to start objecting to the agency’s intrusiveness is now.