The Consumer Financial Protection Bureau (CFPB), created when Congress enacted the Dodd-Frank financial regulations in 2010, is an agency that does the opposite of what its name implies. Two federal lawmakers from Texas have recently introduced legislation to eliminate the agency, HousingWire reported yesterday. Referring to the CFPB as a "runaway agency," Sen. Ted Cruz (R-TX) and Rep. John Ratcliffe (R-TX) have introduced legislation in both houses of Congress to close the CFPB.
"Don't let the name fool you, the Consumer Financial Protection Bureau does little to protect consumer," Cruz said in a statement about the legislation to eliminate the CFPB. "The agency continues to grow in power and magnitude without any accountability to Congress and the people. The only way to stop this runaway agency is by eliminating it altogether."
Cruz and Ratcliffe say the legislation will free consumers and small businesses from the "regulatory blockages and financial activism" of the agency that prevents economic growth. Critics of the CFPB, as theInquisitr reported, believe the agency is out of control and attempted to shut down an entire financial industry – the small-dollar lenders that offer consumers such credit products as payday and title loans.
The agency has gotten out of control, critics state, and many, including Sen. Cruz and Rep. Ratcliffe, believe the only way to reign in the CFPB is to eliminate the agency. Many banks and other financial institutions are finding the increasing burden of compliance with CFPB regulations threatens the existence of their businesses.
"The unelected bureaucrats at the CFPB's helm are wholly unaccountable to the American people. Unlike most federal agencies, Congress does not oversee the CFPB through the annual appropriations process. The agency receives more than $600 million annually from the budget of the Federal Reserve System - monies that Congress does not control. This unique setup makes the CFPB one of the least accountable regulatory agencies in the federal government; a situation that invites regulatory excess and abuse," Sen. Cruz said in his statement about the CFPB.
The CFPB has also created a database of consumer complaints on financial institutions. Additionally, Judicial Watch asserts the CFPB is also adding to its databases information on millions of private bankruptcy records obtained from the U.S. Trustee. This action of the CFPB may threaten the independence of the bankruptcy officer, the Washington Examiner reports.
"The CFPB's regulatory zeal has stripped American consumers and businesses of their freedom of choice and has limited their access to capital - all in the name of a 'we know best' attitude from Washington," Ratcliffe said.
Fewer than 20 percent of Americans know the CFPB exists, the Hill reports.
It is unknown, in part, because as Brian Wise writes for the Hill, "Dodd-Frank created the CFPB outside the authority of Congress, so CFPB regulations can be promulgated without Congressional approval or oversight. It's a consolidation of power, unlike anything this country has seen. It has the ability to impact every American consumer and businesses far beyond the financial services industry including education, auto dealers, and even pothole repair in Tennessee."
A multitude of polling data shows the American people, while they wanted more regulations of the financial sector after the financial crisis of 2008 and 2009, now favor either the same of fewer regulations in many recent surveys. Public confidence in banks and other finaincial institutions has steadily increased since 2009.
There have been efforts by members of Congress to reform the CFPB, including a bill by Rep. Blake Luetkemeyer (R-MO) and Rep. Randy Neugebauer (R-TX) to reform the controversial government agency. The bill, in part, would have replaced the current structure of the CFPB that is largely unaccountable from Congressional budget and oversight authority with a bipartisan commission appointed by the president. CFPB has been called rogue, out of control, and a "Frankenstein Bureau."
An agency that has just turned four years old, the CFPB is already renovating its huge Washington D.C. headquarters at an estimated cost of $55 million to $95 million, the Washington Examiner reported in 2013.
"Moreover, the $95 million is nearly double the General Services Administration's $50 million annual budget for construction, acquisition and renovation for all federal buildings throughout the country," the Washington Examiner reported.
This renovation calculates to about $80,000 for each of the 1,200 employees of the CFPB.
[Photo of the CFPB headquarters from Photographer: Payton Chung/Flickr. Licensed under a Creative Commons Attribution 2.0 Generic license.]