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Old 02-12-2013, 07:46 AM  
Direckshun Direckshun is offline
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The quiet Republican struggle against the Consumer Financial Protection Bureau.

I'm relatively satisfied with the watered down powers of the Dodd-Frank Act, but in particular I have been concerned that most of the law was driven by administrative discretion -- empowering agencies to perform various functions that are broadly described in law.

This is a common tactic of legislation construction -- just empower the agencies to do all the heavy lifting -- but it's particularly problematic when it comes to financial regulation, where the companies being regulated couldn't be wealthier or more powerful if they tried. Wealthy regulate-ees is where you frequently find corruption and bribing of public officials by the score. (Just ask the Department of the Interior.)

But the Consumer Financial Protection Bureau has been a fantastic surprise, rolling out a pretty good list of accomplishments so far in its young lifespan, even though the GOP has sworn to block and all nominations to run it. The Christian Science Monitor provides a short list of some accomplishments:

Quote:
Since it officially began operating July 21, 2011, the CFPB has helped students navigate loans and financial aid, advised consumers on how to avoid credit-card fees, and forced Capital One to pay up to $210 million in fines and reimbursements for pressuring customers to buy or retain additional credit-card services, such as credit monitoring and payment protection. The Capital One enforcement action has drawn the most attention. Not only was the settlement a lot higher than those that other federal agencies have imposed on banks traditionally, the CFPB detailed specific violations and which policy changes the company had to make to be in compliance.
All designed, of course, to prevent predatory commerce against the more vulnerable consumer.

One thing that's nuts to me is that the GOP invests its energy not on improving agencies, but in effectively shutting them down. They've shut down the SEC by stripping them of funding. They've shut down the Future Trading Commission by stripping them of funding. (The CFPB is funded by the Fed, not Congress.) They've shut down the FEC by loading it with lackeys who largely just oppose anything the commission tries to accomplish.

A country run by the uber-wealthy, unperturbed by government regulation, is how you end up with the less-than-ideal (to put it kindly) American government of the late 1800s. Protecting consumers is key to allowing the economy to function at a fuller potential for the lower and middle class Americans, and honestly, most higher class Americans to. Where the pinch would ostensibly felt is at the top 1%, and of course the GOP simply can't let that happen.

http://www.nytimes.com/2013/02/11/op...pagewanted=all

Quietly Killing a Consumer Watchdog
Editorial
Published: February 10, 2013

If you’d like to know why Republicans are trying to shut down the Consumer Financial Protection Bureau, take a look at three things the agency has already accomplished in its first 18 months:The consumer bureau has taken seriously its mandate to protect the public from the kinds of abuses that helped lead to the 2009 recession, and it has not been intimidated by the financial industry’s army of lobbyists. That’s what worries Republicans. They can’t prevent the bureau from regulating their financial supporters. Having failed to block the creation of the bureau in the 2010 Dodd-Frank financial reform bill, they are now trying to take away its power by filibuster, and they may well succeed.

The bureau cannot operate without a director. Under the Dodd-Frank law, most of its regulatory powers — particularly its authority over nonbanks like finance companies, debt collectors, payday lenders and credit agencies — can be exercised only by a director. Knowing that, Republicans used a filibuster to prevent President Obama’s nominee for director, Richard Cordray, from reaching a vote in 2011. Mr. Obama then gave Mr. Cordray a recess appointment, but a federal appeals court recently ruled in another case that the Senate was not in recess at that time because Republicans had arranged for sham sessions.

That opinion, if upheld by the Supreme Court, is likely to apply to Mr. Cordray as well, which could invalidate the rules the bureau has already enacted. The president has renominated Mr. Cordray, but Republicans have made it clear that they will continue to filibuster, using phony arguments to keep the agency from operating.

Earlier this month, 43 Senate Republicans wrote a letter to the president, vowing to block any nominee until “key structural changes” are made, including a bipartisan commission to run the bureau instead of one director, and Congressional control of its appropriations. (It is now financed with bank fees paid to the Federal Reserve.)

These arguments are designed solely to give Congress more opportunities to stop financial regulation. A board evenly divided between the parties would quickly reach a stalemate and become inoperative, much as the Federal Election Commission has become. Besides, board members can be filibustered as easily as a director.

Other bank regulators, like the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, are not subject to the appropriations process, as a shield against political interference. Congress does, however, control the budgets of the Securities and Exchange Commission and the Commodity Futures Trading Commission, and House Republicans have voted to strip those agencies of money needed to regulate derivatives and curb abuses. The consumer bureau was enacted by law, and now Republicans are using backdoor methods to destroy it. There is no greater argument for Senate Democrats to ban filibusters of presidential nominees, particularly when the future of an entire agency is at stake.

Last edited by Direckshun; 02-12-2013 at 07:52 AM..
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Old 02-12-2013, 07:49 AM   #2
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Old 02-12-2013, 07:51 AM   #3
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Old 02-12-2013, 07:54 AM   #4
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Old 02-12-2013, 11:34 AM   #5
Direckshun Direckshun is offline
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My case in point.

http://kaysteiger.com/2013/02/05/the...dit-card-trap/

The student credit card trap
Kay Steiger
February 5, 2013 at 10:00 AM

Good news: The Consumer Financial Protection Bureau is looking into how credit card companies and banks are entering the student credit and banking market. From Inside Higher Ed:

Quote:
The bureau is asking for input on a few separate topics: preloaded debit cards supplied by companies like Higher One, which give students the money left over from grants and loans after paying tuition; arrangements between colleges and banks that allow student identification cards to be used as debit cards; and college-affiliated bank accounts.

College business officers say those products are quite different from one another. Preloaded debit cards have caught on in recent years as a method of giving college students access to federal grants and loans for living expenses. While they have come under scrutiny for high fees, they are a way to give money to students without using paper checks, and do not require a bank account. Critics say students would be better off opening a bank account than relying on preloaded cards.

Higher One has dominated the preloaded debit card market for years, and has come in for much of the criticism for swipe fees, ATM fees and other charges that can chip away at students’ financial aid. As the cards have grown more popular, other banks, including Sallie Mae, have entered the market place.
This is obviously predatory in a lot of ways. Students do get a good deal on loans, but they shouldn’t be taking out more than they need to just to spend on living expenses. Though my alma matter, the University of Minnesota, didn’t go quite so far as to use our student ID cards as ATM cards, they did fold in an application to open an account with TCF Bank* along with the forms I was supposed to fill out for my student ID. Though it’s not necessarily bad to encourage student to open bank accounts, it did leave me with the impression that I wouldn’t get my ID card unless I signed up with this preferred bank.

Of course in retrospect this seems crazy, but as an impressionable 18-year-old college student, it’s easy to see how manipulative marketing financial products can be when they appear to be endorsed by the college. It’s good to see that CFPB wants to bring the hammer down on these types of manipulative practices.
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Old 02-12-2013, 11:39 AM   #6
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