CFPB: Trump targets a monster

President Trump has slammed the Consumer Financial Protection Bureau as a "total disaster" and rightly objects to a second leftist taking the place of outgoing leftwing director Richard Cordray.

His battle is just the tip of the iceberg surrounding this federal agency that shouldn't even be there in the first place.

What Trump is battling is an unaccountable agency run by the Democrats and for the Democrats with the aim of funding more Democrats. It's a shakedown racket targeting banks and other moneybags businesses based solely on the size of their assets to harvest from fines. It was never about protecting consumers. It was never about oversight. It just amounted to a slush fund for Democrats that as set up cannot be reformed.

A long, worthy piece by a Ronald L. Rubin, a former enforcement attorney at CFPB, in National Review, lays out the problems as only an insider's account can.

Conceived as a government watchdog with noble aims, the CFPB was doomed by a structure that made it an inherently political agency.
is how he summed this leftist racket up.
The Democrats under President Obama designed the agency first conceived by Elizabeth Warren so that it would be nominally independent and nominally bipartisan. and of course, be solely devoted to looking out for consumers. In reality, CFPB is unaccountable to the voters and their elected leaders, with its funding under the purview of the Federal Reserve, which is independent itself, instead of the Congress.
Then its creators designed the agency so that no Republican could ever enter it. Rubin writes:
Over the next two years, the economy collapsed, Democrats gained control of Congress and the White House, and Warren grew famous criticizing big banks in congressional hearings. She lobbied Democrats to include her agency in their Wall Street–reform legislation, arguing that effective enforcement of consumer-protection laws required a regulator independent from politicians beholden to the financial industry. The Democrats had a better idea: They would make her agency independent from Republicans.
Rubin describes how the agency systematically discriminated against Republican hires through wink and nod hiring processes and got away with it. As for the director:
Circumventing the Constitution took two steps. First, Democrats inserted a few clever workarounds into the Dodd-Frank Act, which created the CFPB on July 21, 2010. Commissions such as the one Warren first proposed are ostensibly bipartisan, so a president-appointed director would lead the new agency. Since there might be a Republican president one day, the director would be practically irremovable after Senate confirmation to a five-year term that could extend indefinitely until the next director’s confirmation. To prevent future Republican-led Congresses from cutting the bureau’s budget, funding would be guaranteed through Federal Reserve profits rather than taxpayer dollars.
Operationally, they were horrible, too. It took local regulatory agencies and a long Los Angeles Times investigative piece to expose the massive opening of unwanted accounts of consumers by Wells Fargo employees back in 2013.  After all the work was done, CFPB came in and fined Wells Fargo, which was loaded with Democrat donors, the $100 million it got headlines for, ignoring that the agency actually didn't do anything to uncover the bad case of abuse against customers. They weren't in the business of protecting customers, they were just about shakedowns and publicity, as Rubin described.
And that cash they extracted goes solely to Democrat groups.
IBD writes:

Now, a little-noticed item on the CFPB's website reveals the powerful new agency is launching its own scheme to provide backdoor funding for nonprofit urban groups politically aligned with Democrats.

The CFPB plans to create a so-called Civil Penalty Fund from its own shakedown operations targeting financial institutions. Through ramped-up (and trumped-up) anti-discrimination lawsuits and investigations, the agency will bankroll some 60 liberal nonprofits, many of whom are radical Acorn-style pressure groups. It says these organizations will provide "financial coaching" for low-income homebuyers, as well as "housing and social services."

But their activities are more political than charitable. IBD obtained a list of groups eligible for the bank payola, as approved by CFPB Director Richard Cordray and Labor Secretary Thomas Perez. It includes:

• The Legal Aid Society of the District of Columbia, whose directors include senior Democratic National Committee officials; the self-described "policy advocacy" group has lobbied Congress for more welfare spending at least 108 times since Obama took office.

• The Mississippi Center for Justice, whose stated mission is "advancing racial and economic justice" and "attacking predatory lending practices."

• People's Community Action Corp. of St. Louis, which has seated Obama appointees and Democrat lawmakers on its board.

With a setup like this and no possibility of reform or a change of emphasis through elections, is there any reason to keep this agency around? They're partisan, they don't protect consumers, their focus is on going for firms with the largest asset bases to extract fines rather than the companies with the most violations, as Rubin notes, and they fail to cooperate with Congress. If that's not a rogue agency, now appointing its own leftists over President Trump's choices for the agency, what is? President Trump deserves the full support of the Congress and the voters as he battles this leftwing beast.

UPDATE: from Investor's Business Daily: Throw the whole thing out.








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