The Consumer Financial Protection Bureau (previously) is practically the only US regulator we can be proud of — founded by Elizabeth Warren before she ran for the Senate, the CFRB is a consumer protection agency that has been at the forefront of reining in criminal activities like Wells Fargo’s nationwide frauds and Equifax’s dox attack on the USA, as well as being the best defense Americans have against predatory loan-sharks masquerading as “payday lenders,” abusive debt-collectors, racial discrimination in lending, and the student loan racket.
So naturally big business and Trump hate it.
Last month, the GOP reversed the CFBP rule that ensured that Americans could sue banks that defrauded them, but that was just for starters.
Now, CFRB director Richard Cordray is stepping down, likely in a bid for to be the next governor of Ohio, and his departure is a dream come true for the likes of Ted Cruz, who called the consumer protection agency “an out-of-control bureaucracy” and introduced legislation to abolish it; it’s also great news for Senator Ben Sasse [R-NE] who said that “King Richard” should be fired.
The CFRB has been buried in an avalanche of frivolous, well-funded lawsuits, while the likes of Breitbart has whipped up its low-information base to call for the demise of the bureau. These alt-right hordes have been supplemented by massive, well-funded astroturf efforts that also offered huge paydays to the likes of Newt Gingrich.
There are unbelievably large pools of dark money sloshing around in the fight to kill the CFRB. Organizations like the “U.S. Consumers Coalition” won’t reveal their funders and their principal competitors for anti-CFRB is “Protect America’s Consumers,” whose funders are also a secret. But their attack-ads, deceptive reports, and planted news stories are very visible indeed.
Structural reforms to the CFPB will have to make their way through the conflicted GOP leadership in Congress. The party’s pro-business faction backs the idea of neutralizing the bureau by imposing a five-person governing commission. But, said one GOP congressional staffer, “you’ve got a lot of Republicans saying that a single director is not such a bad idea now that Donald Trump is in the White House.” In June, the House passed Hensarling’s Financial CHOICE Act, which Ryan dubbed “the crown jewel” of the GOP agenda. The CHOICE Act keeps the CFPB in the hands of a single director while stripping the bureau of many of its regulatory powers. Yet there is no companion bill in the Senate, where 60 votes are required to make any structural changes to the CFPB. Congressional Republicans can continue to deploy the Congressional Review Act, which they used to reverse the arbitration rule, though at this point, only the fate of the bureau’s payday rule, issued in October, is up in the air. No other major new rules are far along in the pipeline.
Looming as an existential threat to the bureau is a lawsuit that’s been working its way through federal courts since 2015. That was the year the CFPB slapped a $109 million fine on a New Jersey-based mortgage company called PHH that the bureau found had taken illegal kickbacks for referring customers to mortgage insurers. PHH responded by filing a lawsuit that challenged the constitutionality of the agency. In October 2016, just a month before Election Day, a three-judge panel issued a surprise ruling declaring that an agency whose director could only be removed for cause was unconstitutional. Judge Brett Kavanaugh, who wrote the decision, called Cordray the “single most powerful official in the entire U.S. Government, other than the President.” Hensarling declared it “a good day for democracy.” Now he’s called Cordray’s resignation “an excellent opportunity to enact desperately needed reforms.”
NO PROTECTION FOR PROTECTORS
[Gary Rivlin and Susan Antilla/The Intercept]