The Consumer Financial Protection Bureau (CFPB) has certainly made its fair share of headlines over the past few years. From its moves to make debt collections agencies more transparent and accountable to their more recent proposed payday lending rule, the CFPB has managed to maintain a vicelike grip on various sectors of the financial industry. A government organization doesn’t do the kinds of things the CFPB has been known for without amassing its share of detractors and opponents.
For a while, there were only a few individuals or organizations that were vocal about wanting to limit the power of the CFPB. Now, though, there are increasing calls for the Consumer Financial Protection Bureau to be done away with once and for all. Whether or not that will happen is something we’ll all have to wait and see. However, it is interesting that this pet organization of President Obama’s is becoming the target of increasing complaint, as Obama prepares to leave office in the very near future.
The CFPB was created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It has, since its inception, morphed into one of the most unaccountable and powerful agencies of the federal government over the past five years. This agency has a staff of more than 1,000 people and a nearly limitless budget. The CFPB has taken steps to restructure the mortgage industry, put restrictions on the major credit bureaus, change student loans, and to effectively destroy the payday and title lending industries. This massive amount of control of seemingly every type of financial business seems to be a huge overreach and has already led to the demise of more than a few legitimate businesses in this country.
The thing is, the CFPB seemed to be designed to get around the standard checks and balances that most other regulatory agencies deal with from the very beginning. From the top down (and don’t forget, the CFPB is headed up by a single director, and not a bipartisan committee) the CFPB has handed down decisions that make American consumers seem to be like children, who have no idea how to handle financial transactions on their own. The CFPB has been called by some just another attempt by the government to create a nanny state.
When the government makes it a point to meddle in the financial marketplace, there will always be serious consequences. With regards to the CFPB, our laws are being superseded by the whims of a powerful, yet unaccountable agency that is controlled by a single person; an unelected one, at that! The actions that the CFPB continues to take most certainly lead to consumer-level uncertainty. New regulatory statutes handed down by the CFPB will likely wind up costing consumers more while reducing their options for financial services and products.
The lawmakers in this country need to get started with reining in the CFPB immediately. It may start by curtailing the agency’s power a bit. Completely getting rid of the CFPB would likely be the best option for everyone. Protecting consumers is best handled when multiple agencies work together and coordinate their actions. Let’s face it, there are already enough government agencies that were tasked with handling the things that the CFPB now has power over, and these agencies did a better job than the CFPB has been doing as of late.
With a change in guard coming to the White House, it is time for the CFPB to be reevaluated, put in check and potentially disbanded altogether. Failing to do so will likely lead to more financial headaches for small financial businesses and consumers.