Let’s Not Forget About The CFPB

by Stuart Shapiro

The Consumer Financial Protection Bureau received a great deal of attention when it appeared as if Elizabeth Warren would be its inaugural director.  However, Republicans threatened to filibuster Warren’s appointment and after having her oversee the creation of the agency, President Obama appointed Richard Cordray as the first Director.  All OK now that Warren has gone off to become a Senator?  Nope.

You’d think, having ousted Warren, the Republicans would get down to the people’s business. Think again. Now, the Party of No is refusing to confirm President Obama’s new nominee, Richard Cordray, unless the agency is restructured — that is, essentially gutted of its powers to protect consumers. This has nothing to do with Cordray’s credentials — he’s the highly regarded former state attorney general of Ohio — and everything to do with the political gridlock that has enraged voters and engendered cynicism with government. And it lays waste to the lessons that were supposedly learned after the collapse of the mortgage industry and housing market in 2008, when consumer ignorance combined with banking’s predatory practices to create a disaster.

This is the type of stuff that flies under the radar but has a destructive impact.  Getting the CFPB up and running is a step toward restoring confidence in our financial institutions.  Yeah, the corrupt ones will be more likely to go out of business but the honest ones will thrive.  Guess we know which ones the Republicans support.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.