by Jeff Sovern
During hearings on the CFPB and the Choice Act, I kept hearing critics of the CFPB saying they want to increase its accountability (I haven't started listening to the markups yet, but it's probably a recurring theme there too). In fact, the CFPB is accountable. But assume it isn't for the moment. CFPB critics argue that one way it should be made more accountable is by subjecting it to the congressional appropriations process. While that sounds good in theory, the problem is that the voices of lobbyists are much louder at appropriations committee proceedings than the voices of consumers. Corporate lobbyists have the resources to pay attention to the inside baseball of appropriations while ordinary consumers busy making a living and providing for their families don't. The result of such "accountability" in the past has been that lobbyists urge members of Congress to starve regulators of funds if the regulators don't play ball with the lobbyists–and that in turn leads to regulatory capture. That is exactly what happened with Fannie and Freddie's former regulator, which was a disaster. Critics of the Choice Act have been calling it the Wrong Choice Act, but they could also call it the Accountability to Lobbyists Act, because that's what it would create.
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Professor Sovern is absolutely correct. The “choice” and “accountability” buzz words are nothing more than a smokescreen to hide the true purpose of the legislation. It is intended to bludgeon the CFPB into submission, to strip it of the political will to aggressively advocate for consumers. The means to this end is quite clear: threaten its funding by subjecting it to threats of appropriations cut-offs. Trump promised to “drain the swamp” but in reality this is just another move (like with EPA) to feed the beasts and starve the regulators. Let’s hope the Senate has the good sense to reject this overreaching and utterly transparent ploy.