The recently passed (by the House) Consumer Financial Freedom and Washington Accountability Act aims to replace the CFPB's single director with a 5-member commission appointed by the President and confirmed by the Senate, and to bring the CFPB's budget under Congressional control, like other federal agencies. Predictably, supporters of the CFPB are up in arms that the CFPB might become accountable.
U.S. Rep. Maxine Waters, D-Calif., rose in opposition to CFPB reform.
“The CFPB has been immensely successful in protecting consumers. Enforcement actions more than $3 billion refunded to 9 million consumers,” Waters said.
She further said the change to the leadership structure to a five-member commission would increase bureaucracy and weaken the bureau.
"The CFPB has ensured that all consumers have fair and transparent access to consumer financial products and services. It has written important mortgage rules that prevent lenders from engaging in the risky and irresponsible practices that led to the collapse of the housing market and fueled the 2008 global financial crisis," Waters said. "But Republicans don’t believe that we should have a consumer advocate in government – they would prefer these unscrupulous actors continue to take advantage of consumers without interference. And the simple fact is that H.R. 3193 would accomplish this goal – obstructing the CFPB’s ability to protect consumers from deceptive marketing, unlawful debt collection, lending discrimination, overcharged fees and other illegal activity."
Waters, a woman who once threatened in a hearing to "socialize" the American oil companies (she meant to say "nationalize") and who added a provision to Franken-Dodd that created 20 Offices of Diversity in various federal regulatory agencies, now opposes a five-member commission because it adds bureaucracy. If she were a tad more self-aware, you'd be justified in accusing her of hypocrisy. Given her legendary grasp of the English language, she might think you were accusing of her being a large land mammal that lives in river water.
Maxine wasn't the only bleating voice that rose to oppose a bill that now travels to its doom in the Democrat-controlled worm-hole of the Senate. Gary Kalman, EVP of the ironically-named Center for Responsible Lending, was also quick to utter public warnings that the act would have as deleterious effects on the world as does global warming/climate change/alien body-snatching.
“HR 3193 is a blatant attempt to undermine this successful new consumer watchdog,” Kalman said. “In its three years of existence, the CFPB has returned over $750 million to consumers. The agency has mandated an addition $2 billion in foreclosure relief and fined entities that violated consumer laws $81.5 million.”
Housing Wire reporter Trey Garrison mentioned a gaping hole in Mr. Kalman's assertion.
It’s not entirely accurate that the CFPB has returned money to consumers, but rather to states governments and attorneys general, some of which actually goes to consumers.
Does that mean Waters's assertion that $3 billion has been "refunded to consumers" might also be something less than the whole truth and nothing but the truth so help you [insert name of deity, moral principle, or giant rodent of your choice here]? If this stuff keeps up, someone in Washington, D.C. might actually tell a lie. That will be a dark day for this nation.
The arguments of the bill's opponents seem to boil down to the fact that structural changes to the Bureau to provide more oversight and accountability, especially in view of the Bureau's unprecedented powers to, in the wrong hands, do much mischief, should not be made because the Bureau has been "effective." In other words, the ends justify the means and to hell with the notion of checks and balances otherwise built into the American government. That's a very convincing argument if you're a totalitarian. The contention that individual liberty shrinks as the power of the federal government grows, and that power corrupts and absolute power corrupts absolutely, are worn out ideas of a past era that the truly progressive can ignore in order to serve the higher cause of the ideologically "pure." They intend to do what they think is the right thing by whatever means necessary.
The arguments are grandstanding, as is, in many respects, the passage of the law by the House. It was passed along party lines by a Republican-controlled House and will be rejected along party lines by a Democrat-controlled Senate (and would be vetoed with no hope of overturning the veto, by a Democrat in the White House). All this is election year politics, appearance trumping effective governance.
Still, these incidents provide us with blog fodder, and for that small blessing, we are grateful.