The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
In a recent letter to President Obama, 44 Republican senators warned that they would filibuster the administration’s nominee to lead the new Consumer Financial Protection Bureau. Instead, they want the bureau’s director to be replaced by a board of directors. They also want the bureau’s budget to be controlled by Congress, instead of the Treasury Department. And they want to add a further layer of oversight to the board’s decisions.
“This [is] about accountability,” Senator Richard Shelby (R-Ala.), Ranking Republican on the Committee on Banking, Housing and Urban Affairs, said in a press release. “Everyone supports consumer protection, but we should never entrust a single person with this much power and public money.”
[Free Tool: Obtain your Identity Risk Score from Credit.com]
Democrats counter that the Consumer Financial Protection Board already has plenty of oversight. The Dodd-Frank financial reform act, signed into law last year, created the board. It also created the Financial Stability Oversight Council, composed of the leaders of nine financial regulatory agencies. The council has the power to overrule decisions by the board’s director.
“The truth is this bureau is already subject to greater checks and balances than any other financial regulator and this is just another attempt by Republicans to delay and derail these critical new protections,” Tim Johnson (D-S.D.), chair of the Senate Banking Committee, told reporters.
This is just the latest battle in a long war over the bureau, which was created in the aftermath of the economic meltdown to protect consumers from harmful financial products such as predatory mortgage loans. Elizabeth Warren, a Harvard law professor who served as the overseer of the TARP federal bailout program, lobbied for the bureau’s creation and is widely viewed as President Obama’s likely choice to become its first director.
[Featured tool: Get your free Credit Report Card from Credit.com]
Warren is also an outspoken critic of what she sees as Wall Street banks’ deceptive practices, which she says hurt consumers and caused the economic meltdown. The current financial market “is not a free-market system. It’s a rigged game,” Warren told Jon Stewart recently on The Daily Show. “So a few million lose their jobs from time to time. A few million people lose their jobs. People get their retirements wiped out, their savings gone. But a few people did really well.”
Her criticism makes her a lightning rod for Republicans and banking interests, who fear she would hurt the financial industry if named director of the new agency.
“Allowing a single unelected bureaucrat to define their own jurisdiction and regulate vast segments of our economy without accountability or restraint is a ‘reform’ that should be rejected,” Sen. Jerry Moran (R-Kan) said in a press release.
Some consumer finance experts criticized the Republicans’ move to block Warren’s appointment.
“Why would anyone expect anything different from the people whose deregulatory philosophy contributed mightily to the utter economic devastation we barely survived,” says Adam K. Levin, founder and chairman of Credit.com. “Hopefully, in the 2012 elections, the American consumer will remember the guys who really stood up for them.”
“I would say this is a regrettable development,” says Jean Noonan, a Credit.com blogger and attorney who focuses on consumer financial issues, and former Associate Director of the FTC. “I think it’s not good for either consumers or bankers.”
The Republicans’ move may force President Obama to appoint the bureau’s director after Congress leaves on recess. Such recess appointments have been criticized recently by both parties as end-runs around the Congressional nominations process. Given the Republicans’ promise to filibuster, “It’s hard to see how we could have anything other than a recess appointment,” Noonan says.
Image: Sabrina K, via Flickr
March 11, 2021
Personal Finance
March 1, 2021
Personal Finance
February 18, 2021
Personal Finance