Monday, January 30, 2017

King Trump Reinforcing Power Base as GOP Says to America: See what we are doing for you?

Trump and GOP Both Hate the CFPB 
(Consumer Financial Protection Bureau)

Background here from Fortune before the main post:
Within days of being sworn in, President Donald Trump has already pledged to cut business regulations by 75%. One way he is likely to fulfill that promise, at least in part, is by defanging a legacy of the 2008 financial crisis: the Consumer Financial Protection Bureau (CFPB).
Note: The agency has been praised by Democrats and consumer advocates for cracking down on abuses by financial firms, recall for example: It was a key player in the $185-million settlement Wells Fargo & Co. agreed to pay last year for the creation of as many as 2 million accounts without customer authorization.
In a somewhat similar case, the CFPB accused PayPal of signing consumers up for credit lines they had not asked for. PayPal (also from Fortune) was ordered to pay consumers $15 million, and was fined $10 million. Such a step would mean the functional end to the consumer watchdog, which has been responsible for returning roughly $11.8 billion to some 29 million consumers since its inception in 2011. That's an average of $407 returned to each affected consumer, affecting roughly 9% of the U.S. population (assuming no single consumer was a victim in more than one case).

It was important that independent federal agencies not get “mired in partisan politics and added: The new administration really shouldn’t change the job at all. We’re expected to work with different administrations of different points of view. We have … an independent mandate to do what we do and we will continue working to protect consumers.”
CFPB Accomplishments since it was formed partly in response to reports of deceptive mortgage lending practices that helped precipitate the housing crash of 2008.

1.  It is designed to safeguard consumers in their dealings with the financial-services industry. They have been very effective in moves to curb abuses in the payday, student, and auto lending industries.
2.  The agency has also focused on predatory lending practices that target low-income consumers that can ill afford their loans.
3.  Currently, the bureau is funded by the Federal Reserve, and therefore doesn't report to elected leaders and does not use taxpayers’ money.
Sen. Ben Sasse (R-NE) and Sen. Mike Lee (R-UT) called for replacing the current director (Richard Cordray) of the independent bureau with a multi-member panel that can be controlled by Congress. Trump wants Director Cordray out — even if the legality of firing the independent director is still up in the air (Politico report).

Rational Question: Can Trump fire the head of the independent consumer bureau, which was created by the 2010 Dodd-Frank financial regulatory overhaul, is the subject of an ongoing legal dispute. Cordray’s five-year term doesn’t expire until July 2018, and an agency spokeswoman has said he has no plans to step down.
This month, two Republican senators called on Trump to fire Cordray, echoing the views of many GOP lawmakers who believe the agency’s efforts have restricted lending and reduced consumers’ choices. 
Asked Monday if Trump was going to shake up the bureau’s leadership before Cordray’s term expires next year, White House Press Secretary Sean Spicer said “no decision has been made at this time on that.”
Rep. Maxine Waters (D-CA) and 37 other members of the Congressional Black Caucus wrote to Trump on Tuesday saying they “would strongly oppose any attempt to remove Cordray” and “would view such an action as an illegitimate abuse of power,” then adding: “Director Cordray has done nothing to give the necessary cause for his removal from office. Communities of color and, indeed, all consumers in America will benefit from having director Cordray remain in his position and continue to independently implement the mandates imposed upon him by Congress as the director of the CFPB.”
Trump further has said he wants to dismantle Dodd-Frank and seeks Legislation from House Financial Services Committee [Chairman Rep. Jeb Hensarling (R-TX)] to overhaul the law and rename the bureau the Consumer Financial Opportunity Commission (CFOC), to replace the single director (Mr. Cordray) with five commissioners and subject its budget to congressional appropriations and thus congressional oversight, which takes away the “independent” aspect.
(I note: That if this were to happen, politics and haggling would be the rule of the day other than helping protect American consumers – which this goal, isn’t it?)
Sen. Ben Sasse (R-NE) and Sen. Mike Lee (R-UT) based their firing request on an October federal appeals court ruling that the consumer bureau’s structure is unconstitutional because it gives the director too much power.
The say and seem to imply that under Dodd-Frank, the director serves a five-year term and can be removed only “for cause,” such as neglect of duty, supported by a 2-1 ruling from a three-judge panel of the U.S. Court of Appeals for DC that said in part that structure violated the Constitution’s separation of powers because it limited the president’s authority. Further, that court said the solution to strike down the law’s “for cause provision, means the president can remove the CFPB director for any reason, the same as with other executive branch appointees”
The CFPB is appealing that ruling, asking all of the court’s judges to review it. Some legal scholars said the legal challenge could present problems for Trump if he wants to remove Cordray.
Who is Richard Cordray? His is a lawyer and former Ohio AG general, wouldn’t say Tuesday whether he would fight an attempt by Trump to fire him, and he wouldn’t provide his own legal opinion of whether the president had that authority.
Cordray says: “I was nominated and then confirmed by the Senate to serve a term. All the independent federal regulatory agencies have terms that overlap one administration or another. That’s meant to preserve their independence. That’s important because without the independence you end up mired in partisan politics, the big-money special interests … will try to dictate results.”
So, what does all this mean? Simple, to reinforce the power base for Mr. Trump and the GOP who in turn can say, “See what are doing for you? Now reelect us again.” 
I say, for us, we, or even me? Ha, ha — what joke...!!!
The CFPB has done more to help consumers than any hypocritical all GOP-run Congress. This action if carried out is unwarranted and I know 100% will be very unpopular (except for the GOP that is). Time will tell. Stay tuned.

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