The liberal dictatorship of Richard Cordray at the Consumer Finance Protection Bureau (CFPB) came under fire this week when the head of the House Financial Services Committee (HFSC) called for the agency to open up its four advisory council meetings to the public and press.
“Instead of operating behind closed doors, it’s time for the CFPB to live up to its oft-stated commitment to transparency and openness. In the interest of true, genuine transparency and open government, Director Cordray can and should use ‘Sunshine Week’ to take immediate steps that bring the CFPB into the sunlight,” U.S. Rep. and HFSC Chairman Jeb Hensarling (R-TX) said in a written and video statement, HousingWire reports.
Wielding the power of the Dodd-Frank law, the CFPB has become an instrument for liberal tyranny focused against banks, mortgage companies, realtors, and other consumer credit professionals. The agency has been holding meetings in its offices in Washington with various consumer activists, but these meetings are closed to the public. The CFPB’s “advisory groups,” which include the Community Bank Advisory Council, Credit Union Advisory Council, Academic Research Council, and Consumer Advisory Board, are made up of industry representatives, consumer activists, and academics.
“What goes on at these meetings?” asked Rep. Sean Duffy (R-WI), a member of the Financial Services Committee who requested to attend the Consumer Advisory Board’s February meeting. “If the CFPB is as committed to transparency as it claims, then why was I denied entry when I asked to attend?”
Imposing a greater degree of transparency and accountability on the CFPB is finally becoming a priority for conservatives. Last month, the House considered H.R. 3193, the Consumer Financial Freedom and Washington Accountability Act, sponsored by Duffy.
H.R. 3193 is a package of bills to bring greater accountability and transparency to the powerful CFPB. These bills passed the Financial Services Committee on November 21, 2013. H.R. 3193 does the following:
- Replaces the single, unaccountable CFPB Director with an accountable, five-member Commission appointed by the president and confirmed by the Senate to ensure that a diversity of viewpoints inform the CFPB’s regulatory and enforcement agenda, and to conform the CFPB’s governance to that of other federal agencies charged with consumer or investor protection.
- Subjects the CFPB to the regular appropriations process and makes the CFPB a stand-alone independent agency rather than a bureau within the Federal Reserve System.
- Prohibits the CFPB from using a consumer’s private, personal financial information without the consumer’s knowledge and consent. The CFPB is currently engaged in a massive, multi-million dollar data collection effort of consumers’ financial information.
- Prevents the CFPB from undermining the safety and soundness of U.S. financial institutions through regulatory overreach.
- Sets the basic rates of pay for CFPB employees in accordance with the General Services (GS) scale.
The CFPB as an agency is out of control. Richard Cordray, the former Ohio attorney general, is a doctrinaire liberal who views consumer protection as a means of extracting large monetary settlements from banks and non-banks alike. So far, the financial services industry has been cowed by Cordray and his agency, which is populated with former prosecutors with little knowledge of the mortgage or consumer lending industries. The dictatorial approach of the CFPB to regulating the mortgage sector has led to a sharp reduction in the availability of credit to the residential housing sector.
As Chairman Hensarling noted with respect to the CFPB reform legislation:
These are modest, common-sense reforms that bring a modicum of accountability and transparency to the CFPB. We know that this is an agency that was designed to be unique, if not perhaps rogue; it is an agency like no other. Arguably it is the single most powerful and least accountable Federal agency in the history of our nation and thus demands rigorous oversight. The American people deserve better.
The CFPB has also come under recent scrutiny for its plans to spend $145 million on office renovations for a building it does not even own. Chairman Hensarling brought these planned renovations to light during a hearing with CFPB Director Richard Cordray earlier this year.
Since that hearing, the Federal Reserve Inspector General announced earlier this month that it has launched an investigation into why renovation costs for the CFPB’s headquarters “have soared to more than three times the original estimate,” the Washington Examiner reports.
While Cordray is drawing increased fire from House Republicans, the banking and consumer finance industries remain largely passive in the face of the CFPB’s tyrannical rule. The damage done by Cordray and the CFPB to the US housing sector is massive, yet so far neither the US Chamber of Commerce nor any of the large banks have been willing to confront Cordray publicly.
As the head of one large bank told Washington & Wall Street last week: “Why isn’t anybody talking about how Dodd-Frank and the CFPB are wrecking the housing recovery?” Why indeed.