In the American Banker (behind paywall but available on Lexis). The essay is about how the CFPB is repeating the mistakes of the past. Excerpt:
The Consumer Financial Protection Bureau is systematically removing guardrails designed to prevent abuses in the consumer finance market. With each retreat from its oversight obligations, the CFPB is expanding the opportunities for firms to market exploitative products and services.
* * *
Twenty years ago, the federal bank regulators — the Federal Reserve, the Office of the Controller of the Currency, the Federal Deposit Insurance Corporation and the Office of Thrift Supervision — refused to exercise their authority to curb banks’ appetite for risky and exploitative loans. Likewise, Congress ignored calls for intervention to prohibit lenders from making loans that borrowers could not afford. Through deceptive marketing and business practices, lenders made dodgy loans to the most naïve borrowers and cashed out by selling bundles of these loans to investors. A race to the bottom ensued with lenders of all stripes pushing loans that eroded the stability of the entire financial system — a fact disastrously revealed by the economic collapse of 2008.
