by Jeff Sovern
I kid you not.
The House Committee on Oversight and Government Reform, chaired by Darrell Issa, and its Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs, chaired by longtime CFPB foe Patrick McHenry, has issued a report titled THE CONSUMER FINANCIAL PROTECTION BUREAU’S THREAT TO CREDIT ACCESS IN THE UNITED STATES. Here are the relevant paragraphs (footnotes omitted):
In addition to concerns over the Bureau’s powers and uncertainty about the validity of Mr. Cordray’s appointment, questions exist about the CFPB’s development as an independent regulatory agency. On January 6, 2012, two days after Mr. Cordray’s controversial "recess" appointment, President Obama visited the CFPB headquarters in what was described as a "victory lap" to celebrate the appointment. Later that month, Mr. Cordray attended the President’s State of the Union address as the guest of First Lady Michelle Obama. Since his appointment, Mr. Cordray has also met regularly with senior Administration officials, including White House Deputy Chief of Staff Nancy Ann DeParle, and he attended an event in April 2012 called the "White House Cabinet Affairs Chief of Staff Lunch."
Other CFPB employees have enjoyed similar access to White House officials. Meredith Fuchs, the then-CFPB Chief of Staff, and Lisa Konwinski, the CFPB’s Assistant Director of Legislative Affairs, met with Gene Sperling, the Director of the National Economic Council, in February 2012. Although these meetings are not inappropriate per se , the appearance of a close and coordinated relationship between CFPB officials and political elements of the executive branch undermines the Bureau’s authority as a neutral and independent regulator. The Committee is concerned that this appearance of impropriety could jeopardize the CFPB’s ability to act effectively and independently.
So apparently it is no longer proper for CFPB officials to have contact with the White House. I can't help noting the absence of listed contacts with Republicans. Is that because there weren't any (is this about jealousy?)? If there were some, should we also be concerned about meetings with Republicans tainting the Bureau?
The Report also contains the usual GOP talking points, although with more stridency than we normally see: they fear "the CFPB will become a run-away regulator unlike any other in American history." Sigh. Here's the Executive Summary (footnotes omitted):
The Consumer Financial Protection Bureau exercises tremendous and unmatched authority over American financial products and services. Created by the Dodd-Frank Wall Street Reform and Consumer Protection Act and given virtually limitless power, the CFPB has the real potential to severely reduce credit access for American consumers. Its unique structure, vague mandate, and lack of accountability position the Bureau to be an aggressive and heavy-handed financial regulator. The controversial and legally questionable selection of its first director – former Ohio Attorney General Richard Cordray – adds unneeded uncertainty to financial markets. The CFPB’s apparently close relationship with the Obama Administration has allowed the White House to attempt to use the Bureau to further its partisan agenda. These circumstances, and the manner in which the Bureau has begun to exercise its authority, suggest that the CFPB will become a run-away regulator unlike any other in American history.
At a time of prolonged economic strain, American consumers can ill-afford such an unaccountable, unresponsive, and all-powerful financial regulator. The Federal Deposit Insurance Corporation estimates that almost 30 percent of all Americans do not have adequate access to traditional financial services. Another study finds that half of all Americans could not produce $2,000 within 30 days in response to a financial emergency. Under the regulatory burden of the Dodd-Frank Act, financial products and services are costing more and small community banks are closing up shop at a pace of hundreds per year. Credit access has shrunk as lenders have raised lending standards and stopped offering some products and services. These effects have been felt most keenly by those borrowers at the margins, creating an economic divide in the United States between those with access to credit and those without.
By all indications, the CFPB shows no signs of letting up. If the Bureau is not careful to add clarity and much-needed certainty to the financial sector, the CFPB may continue to drastically affect credit access for millions of American families and small businesses.
Yet the CFPB’s unprecedented structure and vague mandate threatens to restrict credit access even further. The regulator has refused to add certainty to its nebulous and overly burdensome regulatory authority, causing banks and credit unions to restrict certain credit products and services for fear of litigation and enforcement actions. The heavy-handed regulations proposed by the CFPB have proven costly for financial institutions, making borrowing more expensive and credit less available. In exercising its vast regulatory powers, the Bureau has not implemented adequate measures to fully assess and address the impact of its actions on credit access.
Already, according to estimates, the CFPB has increased the cost of consumer credit by a total of $17 billion and depressed job creation by about 150,000 jobs. By all indications, the CFPB shows no signs of letting up. If the Bureau is not careful to add clarity and much-needed certainty to the financial sector, the CFPB may continue to drastically affect credit access for millions of American families and small businesses.