The Consumer Financial Protection Bureau: What Does It Mean For You? (Not Much)
OK, so having overhyped Carmageddon last week, it’s time to talk about a serious and relevant topic, the new Consumer Financial Protection Bureau. I don’t need to say a whole lot on this topic, since this article explores some of the possible potential of the Bureau and this article reminds us that it will all probably end up being nothing but a lot of talk and watered-down “initiatives” and reform. The main point I want to make is that by the time some event/trend/whatever has reached the point where it needs a federal bureau to look into it, that means there are definitely big problems with it and that the new bureau is not going to be able to do much to stop a tidal wave of activity (Example: FBI. Catches lots of criminals every year but do you think that means they’ve stopped the flow of counterfeit cigarettes or whatever else into the country? NOT ONE BIT).
So when we talk about a Consumer Financial Protection Bureau, the government is basically telling you there is no consumer financial protection in the United States, they had an “Oh, sh*t” moment and are frantically trying to put a friendly face on a HUGE issue with no easy answers. As the second New York Times article points out:
Republicans have unsuccessfully tried to chip away at the authority and structure of the agency by proposing a commission instead of a single director to oversee it, among other ideas. They signaled Thursday that they want to reduce the agency’s powers by challenging the salaries of some staff members, the justification for its budget decisions, its authority to look into certain types of financial institutions and practices, and a number of other organizational issues.
Which sounds like there isn’t even any promise that the CFPB is going to be able to do anything. It’s counter-intuitive to say that a so-called protection bureau should be limited in its “authority to look into certain types of financial institutions and practices” because that is supposed to be the whole POINT of this stupid agency in the first place. But when something has “Consumer” in its name instead of “Citizen” that already says to me that the agency is sort of BS (We should be protecting the citizens and residents of America. Calling us consumers is demeaning and makes me envision mindless drones at the mall sipping Orange Julius and buying cell phone accessories from overpriced kiosks). Which is not to say that Elizabeth Warren isn’t doing some great work, but one person cannot stand in the way of an industry that has been very effective at making billions in fees and interests, whether it is from a mortgage or a credit card or other type of loan. Now all of a sudden this brand-new agency is going to try to stand in the way of those healthy, growing revenues? I’m interested to see where this whole thing leads (Prediction: Nowhere).