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Don't Pick A New Head For CFPB — Close It Down Instead

Regulation: Like so many bureaucracies, the Obama-era Consumer Financial Protection Bureau, a creation of the Dodd-Frank financial reform bill, began with the very best of intentions. But it has failed to do its job. Following the resignation of CFPB chief Richard Cordray, it's a good time to consider shutting down the agency altogether.

CFPB is often mischaracterized as a "consumer watchdog" in the mainstream media. Consumer attack dog is more like it.

X Set up to protect consumers from predatory lenders and rogue banks, the CFPB has in fact led to less credit for financially troubled Americans, and is arguably not even legal. And no, that's not just our opinion.

An October 2016 Supreme Court ruling found CFPB's structure to be unconstitutional, a violation of the separation of powers in the nation's supreme law.

One element of the high court's decision was that Cordray could only be fired by the president for cause — making it very hard to get rid of even an incompetent in the job. Worse, by funding the CFPB from the Federal Reserve, not Congress, the agency lay just outside the direct oversight of Congress. It had massive power over finance in the U.S. economy, with little or no accountability. Cordray did little or nothing to remedy this.

"We are long overdue for new leadership at the CFPB," said House Financial Services Committee Chairman Jeb Hensarling of Texas. "The extreme overregulation it imposes on our economy leads to higher costs and less access to financial products and services, particularly with lower and middle incomes."

Hensarling hits the proverbial nail right on the head. As such, why name anyone to the post? It's a rotten agency, prone to overregulation and never really needed at all. While Republicans might like to have one of their own as its head, imagine a less market-friendly administration in the future — one that will use the CFPB as a political bludgeon to go after political foes and industries it doesn't like.

No, don't name a new head for the CFPB. Close it down entirely while you have the chance.

In its short life, the CFPB has already abused its power and failed to use its power when it might have helped.

Remember the Wells Fargo "upselling" scandal, in which the bank's employees either misled some people into opening accounts for services they didn't need or want, or actually opened accounts in the names of some customers without them knowing about it — which is fraud.

And who was regulating Wells Fargo? The CFPB. But it didn't catch on until a story in the Los Angeles Times pointed out the practice.

Even worse is the politicization of the CFPB, particularly under President Obama. Operation Choke Point, a multiagency effort spearheaded by CFPB, was a thinly-veiled effort at going after lawful businesses that the Obama administration didn't like.

For example the CFPB's crackdown on so-called payday lenders has been a disaster for many poor and lower-middle-class Americans. Some people in low-paying jobs can't get access to credit and often pay big fees for checking and other bank services. These small-dollar lenders serve a function that can't be replaced, yet they have been targeted by the CFPB as if they were major financial malefactors.

The CFPB also promulgated the much-hated anti-arbitration rule, which benefited class-action lawyers and encouraged pricey lawsuits while discouraging companies and consumers from having their disputes arbitrated.

This agency began in 2010 as a power grab over the economy by the Democrats then in control of Congress and the White House. But it's just one in a long tradition of agencies and gobbledygook bureaucracies created by progressive Democrats over the past 100 years, founded in the belief that average Americans are too stupid to run their own lives and instead need Washington "experts" to run their lives for them.

From nothing in 2010, the agency now employs more than 1,600 people, with $647 million in budgeted spending last year and another $525 million in civil penalty fines — often collected without any due process for those who were forced to pay up.

Last January, Michael McGrady wrote on The Daily Caller website, "Like every new government program, (CFPB) became a corrupt political bargaining chip in Obama's administration with the sole mission to assert government supremacy over the economy." Nothing has changed since then. As we've said before, shut it down.

RELATED:

How Can We Fix The CFPB? Shut It Down 

Don't Reform The CFPB — Shut It Down 

Repeal Dodd-Frank!


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