Since its creation, the Consumer Financial Protection Bureau (CFPB) has been a source of controversy. Its proponents claim it is the only thing standing between the average American consumer and out-of-control financial institution greed. Its opponents – often those same accused banks, Wall Street leaders, and legislators that side with them – see it as a gross abuse of regulatory power over the natural workings of the American economy. Through the efforts of the CFPB alone, more than $12 billion has been returned to consumers, paid out by banks that were found in violation of its regulations. Most recently, the CFPB hit the headlines after its director, Richard Cordray, resigned. Before leaving, he named a new deputy director, Leandra English, the preexisting chief of staff at the CFPB. The agency’s own rules would automatically assign English as the new director as soon as Cordray stepped out. However, Trump has put his hat into the ring by unexpectedly naming Mick Mulvaney, the Office of Management and Budget director, as the new director of the CFPB as well.
Who Would Win: Banks or Consumers?
There is currently a power-play toss-up between who will end up sitting on the CFPB director’s chair. Both English and Mulvaney have exercised power as if they are the acting director, and indeed they both are. Will one back down before the other, or ever at all?
However, the conflict is nothing new to the CFPB. Elizabeth Warren, the brain behind the agency, was assumed to be a pencil-in director once it was established back in 2011, but Republicans fought tooth-and-nail to keep her out. It even took two years to get Cordray officially named as its director due to Congressional infighting and lobbyist interests.
Yes, the conflict between the Consumer Financial Protection Bureau and big banks has been around since day one of its inception. It is no surprise, though. The agency puts a spotlight on the dirty laundry of financial institutions and does not pull punches when it comes to enforcing regulatory penalties. Just recently, the agency made Wells Fargo drop $190 million in fines, fees, and refunds after it was found the bank was intentionally creating fake user accounts to pad its records.
The middle ground between both sides of the argument is difficult to see. Many Republicans want the CFPB to be funded by Congress and the President to be given the power to fire its director. On the other hand, many Democrats want Mulvaney replaced by another potential nominee since he actively tried to dismantle the CFPB while still a Congress member. It is not clear if the line between the opposing parties will ever be moved.
(You can learn more about this ongoing story by clicking here and viewing a full article posted by CNN Money.)
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