They say insanity is doing the same thing again and again and expecting different results.
Let’s take the protection of consumers, for example.
We’re still recovering from the Great Recession, which was created in large part by fundamentally bad and, in many cases, predatory practices by financial companies.
Out of that chaos came the Consumer Financial Protection Bureau, born as part of the Dodd-Frank financial reform package of 2010. The law was in direct response to the shady conduct of several companies on Wall Street.
But since the agency’s founding, numerous members of Congress, mostly Republicans, have argued that companies now know better and can correct their own bad behavior. There is no need for additional oversight of the financial industry, they contend.
That’s insane.
Had the corporations been acting in the best interest of their customers, we wouldn’t have had the last recession.
Throughout history, Congress has had to step in to make corporations do the right thing. That’s why we have rules about working conditions. That’s why we have a minimum wage.
And that’s why the CFPB was established to help with gaps in consumer protection. It was time to do something different. It was time to set up an agency with as little political influence as possible that would work solely on behalf of consumers.
But still some legislators, with big business buzzing in their ears, want to roll back to a time of “let the buyer beware.” I guess the housing crisis is ancient history to them.
Last week, opponents of the CFPB scored one victory. The U.S. Court of Appeals for the District of Columbia ruled that the structure of the agency is unconstitutional.
The court objected to the CFPB being run by a single director who can only be removed “for cause” by the president. The case was brought before the court by PHH, a mortgage lender that had been fined by the CFPB for $109 million for allegedly referring consumers to mortgage insurers in exchange for kickbacks.
The court ordered that the agency be under the president’s control and that the director could be removed at will. Detractors want the CFPB to be run by a bipartisan committee similar to the Securities and Exchange Commission. PHH had also wanted the court to shut down the entire agency.
We are at a moment when “bipartisan” often means “gridlock.” Our country is so divided politically and ideologically — and in such a hostile way — that subjecting the CFPB to a tug-of-war between Democrats and Republicans could render it impotent.
A statement from the CFPB said the agency is “considering options for seeking further review of the court’s decision,” adding that the ruling “will not dampen our efforts or affect our focus on the mission of the agency.”
Also transpiring last week, embattled Wells Fargo chief executive John Stumpf retired in the wake of a massive scandal in which the financial services company was found to have opened 2 million unauthorized deposit and credit-card accounts. The CFPB fined the company $100 million. Wells Fargo employees, under heavy pressure to meet sales targets and to earn bonuses, had opened the accounts without the consumers’ knowledge. The bank will also pay a $35 million penalty to the Office of the Comptroller of the Currency, and another $50 million to the city and county of Los Angeles.
The bottom line: Critics of the CFPB, many of whom have a biased agenda to back the financial industry, don’t want a consumer watchdog holding these corporations accountable. We would be foolish to allow them to succeed at that mission.
Michelle Singletary welcomes comments and column ideas. Reach her in care of The Washington Post, 1150 15th St. N.W., Washington, DC 20071; or singletarym@washpost.com.
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