Hensarling on the CFPB

House Financial Services Chair Jeb Hensarling gave a speech today to the American Bankers Association Frank Act.   During the speech, he said the following about the CFPB:

[T]hey’re certainly not helped when Obama’s Financial Control Law [his name for the Dodd-Frank Act that created the CFPB, among other things] has killed off a benefit many, if not most, consumers once took for granted:  free checking.  Before it became law, 75 percent of banks offered free checking.  Just two years later, only 39 percent did so. 

Furthermore, as account fees rise due to Obama’s Financial Control Law, so do the number of low and moderate income households who are unbanked or underbanked – a number that stands at more than 34 million, according to the FDIC.

Only someone from Washington would dare call this “consumer protection.”

When it comes to the Orwellian-named Consumer Financial Protection Bureau, the Federal Reserve reports that – when fully implemented – one-third of black and Hispanic borrowers will be denied home ownership opportunities by the CFPB’s Qualified Mortgage rule.

Regrettably, it looks like the consumer protection agency is going to “protect” millions of Americans right out of owning a home.

If there were any justice in the world, consumers would be able to sue the CFPB for unfair, deceptive and abusive practices – early and often!

* * *

James Madison, in Federalist 47, . . . . wrote, “The accumulation of all powers, legislative, executive, and judiciary, in the same hands…may justly be pronounced the very definition of tyranny.”

If that doesn’t sound like the very definition of the CFPB, then I don’t know what does.  It is a case study in the overreach and pathologies of the unaccountable administrative state run amok.  At almost every opportunity, the Bureau abuses and exceeds its statutory authority, which is already immense.  The Bureau operates with such secrecy, unaccountability and bureaucratic tyranny it would make a Soviet Commissar blush!

It intentionally or, at best, negligently makes bad policy.  It acts as judge, jury and executioner – all without accountability and due process.  This should alarm every American.  Because as we become less governed by the rule of law and more governed by the whims of Washington regulators — fear, doubt, uncertainty and pessimism are sown. 

The Bureau typifies not only the shadow regulatory system but also the unfair Washington system that Americans have come to loathe:  powerful government administrators, arbitrary rules, and unchecked power to punish or reward.   

Hensarling promised a GOP alternative to Dodd-Frank shortly.

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