Abolish financial protection bureau before it does more harm

Abolish financial protection bureau before it does more harm
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With each passing week, the speculation grows that the activist liberal head of the Consumer Financial Protection Board (CFPB), Richard Cordray, will jump into the race for governor of my home state of Ohio.

I’m confident that the great people of Ohio will reject his radical, liberal philosophy and keep him out of the governor’s mansion. However, what is truly concerning to me is that Director Cordray is only using the bureau to protect his own political interests as he continues to use the agency’s limitless power to shore up support among his trial lawyer friends ahead of his expected run for governor.

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The CFPB is nothing more than an Obama-era regulation mill and Director Cordray has been using this rogue agency to punish consumers, small businesses and financial institutions that serve our local communities, since its inception.

 

Cordray was installed as head of the CFPB in a recess appointment, when it became clear that the Senate would not approve his nomination. Since then, Cordray’s management has been a model of mismanagement, waste and a radical ideological agenda that targets businesses, while doing nothing to help consumers.

A few weeks ago, the Competitive Enterprise Institute (CEI) released a report that details numerous harmful regulations and actions by the agency, which is virtually unaccountable to Congress.

“The Consumer Financial Protection Bureau was set up under the Dodd-Frank act of 2010 in violation of constitutional norms ostensibly to protect consumers from bad actors in the banking and financial services industry, but the agency is instead actively harming consumers, pressing ahead with regulations even when the benefit to consumers is likely to be outweighed by the costs,” Iain Murray, the report’s author, wrote.

CEI urges not only for serious reform of the CFPB, but also entertains a legislative solution to abolish this rogue agency once and for all. As the group explains, the CFPB’s “one-size-fits-all approach” to rules impacting financial services companies doesn’t take into account the unique financial needs of a “large and diverse society.”

This, in effect, has not only “denied many consumers access to useful, money-saving products,” but moreover “is deeply at odds with the needs and aspirations of millions of individual American consumers.”

Many of the business, consumer and financial groups that have found themselves in the crosshairs of the CFPB’s regulatory chokehold have responded.

Last week, the U.S. Chamber of Commerce, the American Bankers Association and other groups filed a lawsuit against the CFPB’s arbitration rule, which they claim would raise interest rates for consumers all to pad the coffers of trial lawyers who want a better environment for bringing lawsuits.

Additionally, the president of the National Treasury Employees Union Chapter 335, which represents CFPB employees, testified that he’s observed widespread problems within the agency. The union president Robert Cauldwell, also a CFPB examiner, heavily criticized the agency’s director at a congressional hearing in 2015.

As I wrote in a previous column in 2015, the CFPB levied an $80-million fine against Ally Financial after finding that they committed wrongdoing and defrauded consumers. What did the CFPB do with the $80 million fine under Cordray’s leadership?

Rather than improve its internal systems to identify victims, the CFPB gave the money away to various organizations — a “who’s who” of powerful left-wing activist groups.

In fact, many of these types of groups were listed in a recently reported  story on how the CFPB “continues to force financial institutions it prosecutes to donate to third-party community organizers,” through its $170 million “Civil Penalty Fund.”

It’s likely no coincidence that these same groups receiving money from CFPB pushed for the agency’s creation in the first place.

As the Trump administration successfully continues to roll back harmful, Obama-era policies, the next place they should look to continue this effort is in bringing an end to Cordray’s harmful regulatory reign, which boosts his profile for a run for office and endears him to the trial lawyers and left-wing activists who can fill his campaign coffers.

The administration also needs to put an immediate freeze on all CFPB rules and regulations and replace Cordray immediately so that we can put a stop, once and for all, to this agency’s out-of-control regulatory agenda that continues to inflict serious harm on the American people and economy. 

Ken Blackwell served as the mayor of Cincinnati (1979–80), the Ohio state treasurer (1994–99), and Ohio secretary of state (1999–2007). He was the Republican candidate for governor of Ohio in 2006.