We’ve been talking a lot lately about the Consumer Federal Protection Bureau and all the awesome stuff it’s been up to, but we may not be talking about it at all anymore if Republicans have their way. They’re doing everything they can to dismantle the consumer watchdog, from filibustering to sending sassy letters to President Obama. All the progress the bureau has made could be for naught. This concerns us, and regardless of your political affiliation, it should concern you as a consumer too.
The CFPB was born of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a piece of legislation that Republicans almost unanimously opposed from the start. The CFPB is set up in such a way that it cant operate without a director. Knowing this, Republicans filibustered in 2011 and blocked the president from appointing a leader to the organization, thus delaying its launch.
In 2012, however, President Obama appointed Richard Cordray to direct the CFPB while Congress was in recess something that the GOP insists was unconstitutional. A couple of weeks ago, 43 Republican senators wrote the president telling him theyll block any nominee to the CFPB unless he makes significant structural changes to the entire agency.
Republicans say the CFPB should have a panel of directors rather than just one, but Democrats contend that having a board of directors would impede progress too many cooks in the kitchen. The agencys impressive list of accomplishments in just its first 18 months indicates to us that its current structure is working out just fine. Conservatives also argue that the CFPB as a whole is too powerful. Normally wed be sympathetic to the argument that a government agency wields too much power, but the sole purpose of the CFPB is to protect consumers. Is there really such a thing as too much consumer protection?
We think not. To us, it seems that the Republicans motives here are less about checks and balances and more about the checks the financial services industry has written them. The 44 Republican senators who signed the filibuster in 2011 received a total of $6.5 million in contributions from the financial industry that year, and over $125 million throughout their careers. Goldman Sachs even slipped Senator Richard Shelby (R-Ala.) $5,000 the day after he publicly condemned the CFPB as dangerous. Thats not to say Republicans are the only politicians influenced by big business, of course.
So what might happen if the GOP is successful at chipping away at the CFBPs power? It could mean that all the good things that have happened will be invalidated. Credit card companies might once again be permitted to market exploitative financial products on college campuses. Banks might revert back to their past deceptive mortgage loan practices. American Express may not have to dish out the $85 million it owes its customers to make up for its shady practices. Basically, we wont have anyone looking out for us anymore.
Republicans successfully blocked Cordray from being appointed in 2011, so it stands to reason that their efforts to interfere with the CFPB will continue to be effective in 2013. Contact your representatives and let them know you need the CFPB. Then, share this article with your friends and encourage them to do the same. Because whether youre a guns-and-God conservative, a bleeding-heart liberal or something in between, at the end of the day we’re all consumers.