Consumers Need a Financial Protection Bureau with a Bite

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In an economy based on credit ratings and scores, a financial bureau designed to protect consumers would seem like a no-brainer.  And, if you were asked what you wanted in this bureau, you would probably note a few key ideas and requirements. First, you would want a bureau that was not in the pocket of major banks, lenders, or anyone else, for that matter.

Your financial protection bureau would have the power to actually have an impact, through its ability to make and enforce rules, and additionally, have the power to hold those responsible for breaking the laws accountable.  The ideal bureau would have a leader that was dedicated to consumers, had a backbone, and the education and background to lead such an important organization.  These basic requirements should be common sense, right?

Now, what if you were told that a financial protection bureau was being created, but due to political partisan agendas it would not have any of the elements required to make it truly an effective consumer protection agency.  You would probably wonder, why even go through the trouble of creating such a pointless bureau.  Well, that's exactly the scenario playing out before consumers today. 

To give you a little background, the Consumer Financial Protection Bureau is the result of the Dodd-Frank Act of 2010.  Among other things, this bureau is suppose to restrict unfair, deceptive, and abusive practices common in the financial industry; supervise and enforce Federal consumer protection laws, monitor the financial market for possible risks to consumers; and promotes financial education.  Supposedly, the bureau would go into effect on July 21, 2011.  Yet, as common with most good plans and ideas, it has been met with a wall of opposition, bureaucracy, and the good old system of political interests.

A letter was sent to President Obama, in which Republican Senate leaders pretty much stated that they would challenge the nomination of anyone chosen to head the CFPB, without the adoption of changes to the bureau's structure.  Why would they do this? The simple answer is fear.

Elizabeth Warren was the obvious choice back when the bureau had a chance to make a difference.  And, those that wanted to appease their backers within the financial industry were afraid, and for good reason.  Professor Warren has proven herself as a no nonsense trustworthy fighter for consumers.  I could highlight the ways that Ms. Warren has proven herself.  But, in my opinion the intense opposition that people with special interests have put up in the effort to prevent her nomination and eliminate the influence of the bureau under her leadership --in my view, speaks volumes.  

Bill H.R. 1121, introduced by Republican Spencer Bachus, redirected the leadership of the bureau, because it replaced the single leader model with a commission made up of 5 members.  It may be a cynical observation, but our government proved that the commission approach to any situation was never a good idea.  Though well intentioned, the various motivations, opinions, and background of committee members usually delay decision making--if a decision can ever be agreed upon.  Now, if that were the only political interference, you could probably live with the bureau.
Then, another bill was introduced.  Wisconsin Republican, Sean Duffy introduced H.R. 1315.  This bill would allow a simple majority of bank regulators along with members of the Financial Stability Oversight Council or FSOC to simply veto rules created by the bureau.  Now, this bill practically guaranteed the uselessness of the bureau.  Imagine a prosecutor in a murder trial, where the jury was stacked with that murderer's friends. Chances are good that regardless of the evidence the bad guy would walk on the charges.  The same analogy would work here.  A bureau designed to police an industry, whose decisions must be approved by the heads of that very industry would find itself in the same boat as the prosecutor.  Unfortunately, we, the consumers are forced to play the role of the victim's family.  Sure, the prosecution could offer us hope, but the jury selection eliminated any chance of actual justice.

If that weren't enough to handicap the Consumer Financial Protection Bureau, H.R. 1667 was introduced by West Virginia Republican, Shelley Moore Capito.  This bill delays the transfer of authority to the CFPB, if a Director has not been put in place by July 21st.
One thing is certain out of all this: there is powerful opposition for a strong consumer protection bureau whose sole designation is to act as a consumer's watchdog --one with sharp teeth. Why such opposition?

Honestly, regardless of your political affiliation, if you are consumer you should want a protection bureau that comes with a bite.  To help ensure this agency will be a place where consumer voices matter and truth and honesty prevails, I believe the best person to head this agency would be the tell-it-like it is proven consumer watch-dog, Professor Elizabeth Warren. If you agree that she is the best person for this position, you can help: show your support here.

Tell our leaders that this is not the time for a weak stomach, and certainly not the time for a weak Consumer Financial Protection Bureau. We need a watchdog; one with sharp teeth and a big bite.
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