Thursday, April 7, 2011

Republicans Aim to Water Down Consumer Financial Protection Bureau

The GOP has shown once again what side it is on. Not the side of middle class and working people. The Consumer Financial Protection Bureau ("CFPB"), one of the hallmarks of the Dodd-Frank Wall Street Financial Reform Act, is being threatened even before it emerges to life. On Wednesday, House Republicans unveiled a number of measures designed to dilute, and emasculate the CFPB. Beginning July 21, 2011, the CFPB is set to regulate credit cards, mortgages, and financial products like payday loans. The CFPB, an independent federal agency, is funded by fees charged to banks by the Federal Reserve. Aside from vowing to underfund the CFPB, House Republicans unveiled plans to do the following:

Wise men and women have remarked that we never learn from history. When we look back over the continuing Great Recession that began in 2006-2007, what have we truly learned and observed? Not much. We have bailed out Wall Street and failed to adequately protect middle class and working class Americans. If this concerns you like it concerns me, get active and call your Congressional representative.


  1. This is just another example of economic policy that favors Wall Street and the wealthy and discounts the consumer and the middle-class and poor. The only, ONLY good thing about Dodd-Frank was the Consumer Protection Agency and it is being neutered. Unforgivable.

  2. Anonymous,

    Thank you so much for your comments. I agree with you wholeheartedly. This is happening right under everyone's eyes. We all need to pay attention to what is happening.

  3. Matt W. - UC

    To me this another example of the disconnect between GOP rhetoric and GOP action. One of the lessons of the financial crisis is that when market actors are insulated from the consequences of their actions, they will start acting in irrational ways, and a big enough collective acting in such a manner can seriously distort or bring down markets. If the CFPB is partially designed to prevent runaway abuses, that should have the consequence of markets running more smoothly and efficiently, and yet the GOP, the "party of the free market", is fighting it every step of the way.

  4. Being aware of what's happening around us is important. We all have to be part of everyone's improvement.

  5. I want to thank everyone commenting for their timely and insightful perspectives. Again, thank you!

  6. "The GOP has shown once again what side it is on." Indeed. Moreover, a majority of the Supreme Court showed which side they are on in yesterday's 5:4 ruling in AT&T v. Concepcion. This decision further demonstrates the need for a powerful CFPB.

    Additionally, not only does the CFPB face GOP proposals that will limit its power, but also the GOP is likely to use procedural maneuvers to weaken it before it can start. With the CFPB's July 21st start date quickly approaching, the GOP will undoubtedly use the confirmation process to delay the CFPB from gathering strength and will likely force a recess appointment. Regardless of whether the GOP plans on making a recess appointment a political issue or not, the longer it takes for the CFPB to get a director, the longer it will take for the bureau to become effective. Not to mention that if President Obama doesn't act before July 21st the "CFPB will begin its existence under a cloud, operating under ambiguous legal authority that may limit the scope of its actions." (Kate Davidson, American Banker, Apr. 26th).

    J. Hess
    UC Law