Have you ever wondered why a number of Republicans in Congress are trying so hard to shut down the Consumer Financial Protection Bureau? Could it be because the Bureau is doing a good job? Could campaign contributions play a role in monitoring the opponents? What has the Bureau done to provoke the opposition? Let’s take a look at three things the agency has already accomplished in its first 18 months:
• The Bureau called a halt to predatory practices by mortgage lenders, ensuring that borrowers are not saddled with loans they can’t afford and preventing brokers from earning higher commissions for higher interest rates.
• It secured a $85 million settlement from American Express, which the Bureau accused of deceptive and discriminatory marketing and billing practices.
• The Bureau opened an investigation into questionable marketing practices by banks and credit card companies on college campuses, which often take place after undisclosed financial arrangements are made with universities.
It surely seems like each of these accomplishments was good for the American people. I believe it’s also a good thing that the Bureau has taken seriously its mandate to protect the public from the kinds of abuses that helped lead our nation into the 2009 recession. Fortunately for the American people, the Bureau has not been intimidated by the financial industry’s army of lobbyists. Those lobbyists have been hard at work in Congress and they aren’t looking out for the interests of consumers.
Why would the existence of a strong consumer watch dog be of such great concern to some Republicans in Congress? Could it be that it’s because they can’t prevent the Bureau from regulating huge companies that contribute to political campaigns? Having failed to block the creation of the Bureau in the 2010 Dodd-Frank financial reform bill, some in Congress are now trying to take away its power. Unfortunately, they may well succeed and if so the American people will be the losers.
Obviously, the Bureau can’t operate without a director. Under the Dodd-Frank law, most of the Bureau’s regulatory powers — particularly its authority over nonbanks like finance companies, debt collectors, payday lenders and credit agencies — can be exercised only by a director. Realizing that to be the case, in 2011 Republicans used a filibuster to prevent President Obama’s nominee for director, Richard Cordray, from reaching a vote. The President then gave Mr. Cordray a recess appointment.
A federal appeals court recently ruled in another case that the Senate was not in recess at that time. That opinion, if upheld by the U.S. Supreme Court, will likely apply to Cordray and his appointment as well. If that happens, it could invalidate the rules the Bureau has already enacted. President Obama has renominated Cordray, but Republicans have made it clear that they will continue to filibuster in an effort to hold up his confirmation. That will keep the Bureau from operating and doing its job.
Last month, 43 Senate Republicans wrote a letter to the President, vowing to block any nominee until “key structural changes” are made, including a bipartisan commission to run the Bureau instead of one director. They also want Congressional control of the Bureau’s appropriations. Under the law, as it now stands, the Bureau is financed with bank fees paid to the Federal Reserve. It’s very clear that the lobbyists are trying to get Congress to stop financial regulation. We don’t need a consumer watch dog that is controlled by politics and politicians.
The Federal Election Commission is a prime example of an agency that is controlled by politicians. That has virtually made the Commission a “toothless tiger.” Hopefully, the Bureau can remain intact and independent. Being free of political pressures is an absolute necessity if the Bureau is to carry out its mandated duties and responsibilities. The American people deserve a consumer watch dog – one that is independent of political pressures and influence – and for that reason Congress should back off and let the Bureau do its job.
Source: New York Times
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