They say insanity is doing the same thing again and again and expecting different results.
Take the protection of consumers, for example.
The Great Recession was created in large part by fundamentally bad and, in many cases, predatory practices by some financial companies.
Out of that chaos came the Consumer Financial Protection Bureau, part of the Dodd-Frank reform package. The law was in direct response to shady conduct on Wall Street.
But since the agency’s founding, numerous members of Congress, mostly Republicans, have argued that companies now know better and there is no need for additional oversight.
That’s insane.
If corporations acted in the best interest of customers, we wouldn’t have had the recession.
Throughout history, Congress has had to step in to make corporations do the right thing. That’s why we have rules about working conditions. That’s why we have a minimum wage. And that’s why the CFPB was established to close gaps in consumer protection.
But some legislators, with Big Business buzzing in their ears, want to roll back to a time of “let the buyer beware.”
This month, opponents of the CFPB scored a victory. A U.S. Court of Appeals ruled that the structure of the agency is unconstitutional.
The court objected to the CFPB being run by a single director, who can only be removed “for cause” by the president. The case was brought before the court by PHH, a mortgage lender that had been fined by the CFPB for $109 million for allegedly referring consumers to mortgage insurers in exchange for illegal kickbacks.
The court ordered that the agency must be under the president’s control and that the director could be removed at will. Detractors want the CFPB run by a bipartisan committee similar to the Securities and Exchange Commission. PHH had wanted the court to shut down the entire agency.
Can I interject a bit of common sense?
We are at a moment when “bipartisan” often means “gridlock.” Our country is so divided — in such a hostile way — that subjecting the CFPB to a tug-of-war between Democrats and Republicans could render it impotent.
A statement from the CFPB said the agency is “considering options for seeking further review of the court’s decision,” adding that the ruling “will not dampen our efforts or affect our focus on the mission of the agency.”
The following also occured this month:
The CFPB took action against Navy Federal Credit Union resulting in a $5.5 million civil penalty and repayment of about $23 million to customers for debt-collection practices. The agency charged that when members had delinquent loans, Navy Federal illegally froze electronic access to their accounts and sent threatening letters.
Wells Fargo chief executive John Stumpf retired in the wake of a massive scandal in which the company was found to have opened 2 million unauthorized deposit and credit-card accounts. The CFPB fined the company $100 million. Wells Fargo employees, under pressure to meet sales targets and to earn bonuses, opened the accounts without the consumers’ knowledge. The bank will also pay a $35 million penalty to the Office of the Comptroller of the Currency, and another $50 million to the city and county of Los Angeles.
Elizabeth Warren, who proposed the idea for the consumer watchdog agency before she was even elected to the Senate, said these developments show “efforts to transform the agency’s structure or funding should be seen for what they are: attempts fostered by big banks to cripple an agency that has already forced them to return over $11 billion to customers who have been cheated.”
The bottom line: Critics of the CFPB, many of whom have a biased agenda to back the financial industry, don’t want a consumer watchdog holding these corporations accountable. We would be foolish to allow them to succeed at that mission.
— Washington Post Writers Group
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