And here we see our problem clearly. Banks have been making the rounds recently to Democrats to make the case for making the CFPB into a bi-partisan commission. You read that right — a bi-partisan commission.
In the face of the fact that most banking customers do NOT want their banks to rip them off or misuse their accounts, this is Senator Carper — clearly signaling that ripping off consumers is probably an OK thing for banks to do:
At least one Democrat, Sen. Tom Carper of Delaware, has said publicly that he’s open to the commission idea.
“I’ve been interested in exploring the idea of a commission-like approach,” Carper said in an interview Tuesday. “This is one of these deals we should have open hearings on, discuss and debate it, hear from all sides and then make an informed decision.”
Carper, who represents a blue state where the financial services industry has substantial influence, does not sit on the Senate Banking Committee, but he has long been open to the idea of a five-member commission. When CFPB Director Richard Cordray’s nomination was before the Senate in 2011, Carper said: “We may have to look at the idea of a commission-based structure, and I would love to sit down with my colleagues from the other side of the aisle and debate this issue.”
Now granted that this refers to an old quote where Senator Carper noted that he would like to look at a commission structure for the CFPB, but seriously, this is something that only benefits these banks. The CFPB fined Wells Fargo for opening accounts and credit cards without the knowledge of customers just so they could get bonuses and meet quotas.
In the nearly five years since opening its doors, the independent consumer bureau has issued regulations covering mortgages, payday loans, debt collection, arbitration clauses and for-profit colleges, among other things.
The bureau said it has handled more than 800,000 complaints through a new online database and has obtained $11.2 billion in refunds and other relief for more than 25 million consumers through enforcement actions.
“If people are violating the law they should be made to pay,” Richard Cordray, the bureau’s director, said at a Senate Banking Committee hearing in April. “They should be made to reimburse consumers who are harmed.”
Cordray was lectured by the panel’s chairman, Sen. Richard Shelby (R-Ala.), and other Republicans for going too far.
“There is now growing concern that despite the bureau’s mission, its rules and regulations actually restrict access to credit, increase cost and deny financial products to the consumers who need them,” Shelby said. “Consumer protection should not mean limiting a consumer’s options by … substituting the bureau’s judgment for the consumer’s.”
I have no idea what Senator Shelby means by restricting access to credit. Judging just from my own mailbox, there is plenty out there. What is more restricted are financial shenanigans that end up costing consumers a great deal of money they don’t have to pay. And from where I sit, it is more important that consumers have money to spend on real goods and not on the financial scam of the day.
A commission structure weakens the leadership of an agency. Think of the FEC — as bipartisan as it gets and because of a permanent deadlock, they do nothing and are an ineffective enforcer of campaign finance rules and regulations. This is, of course, useful to both Democrats and Republicans, because they all want to run around these regs as much as possible. We get hurt, because no one is guarding our interests and the system gets more corrupt by the day.
A commission makes sure that there is no place where the buck stops. It lets the function of an agency slide because its commissioners have compromised away its effectiveness or just can’t come to a compromise. A commission can defuse needed rulemaking or enforcement — again because the members can’t come to an agreement. The CFPB is so effective for consumers now because there is a fully empowered Director — much like the FBI has a fully empowered Director.
There are no good arguments for weakening the CFPB. None. So please call him, or write him and let him know it is well past time he represents the people he asks to vote for him on this. We need these consumer protections from a strong agency. While there is no doubt that this Agency may be weakened by the GOP who seem to think that working people voted for them to let banks screw them over, there is simply no reason why Senator Carper should join them.
Ask him to not help the GOP weaken the CFPB. Ask him to represent you for a change. Feel free to send this to him in email or Twitter. Just make sure you call him and make sure you ask your friends to call too.
If hear anything other than yes, he is bamboozling you. Let us know what his folks say and we can help you respond.
But definitely call.