July 21 2011
Financial Protection? Not for Taxpayers
Nicole Kurokawa Neily
Today is the one-year anniversary of another major government interference in the economy – specifically, the financial sector, through the Dodd-Frank financial regulation bill. Coincidentally, today is also the day that the unpopular Consumer Financial Protection Board’s regulatory authority takes effect. I’ve written in the past about the CFPB, asserting that we don’t need such an agency at all.
Although the agency’s original creator, Elizabeth Warren, was dropped by the Administration (her appointment was deemed too controversial), I found this passage in a recent BusinessWeek profile of her illuminating, if not a bit horrifying:
Warren is not waiting for permission to do the job she may never get. She and her small team have hired hundreds of people, at a recent clip of more than 80 per month. The agency has already outgrown its office space and is divided between two buildings in downtown Washington—with branches to be opened across the country. A fledgling staff of researchers is cranking out the CFPB’s first reports, and its first bank examiners are being trained. Meanwhile, the office softball team has compiled a 2-3 record.
Above all, an institutional culture is emerging, and it is largely loyal to Warren and her idea of what the agency should be. …
While Washington bickers, Warren has built the CFPB largely to her specs and almost entirely free of interference from Congress and the Administration, which devotes most of its attention to fixing the economy. Few Cabinet secretaries can claim to have left as indelible a mark on the departments they lead as Elizabeth Warren has already left on the one she doesn’t.
It’s horrifying that this agency – which will have such sway over how our banks operate – is largely opaque, and has been chugging along without oversight. At a time of out-of-control spending, do we really need to be adding more unaccountable bureaucrats to the government’s tab?