The CFPB Will Be A Scar On Obama’s Legacy, As It Should Be

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Michael McGrady Director of McGrady Policy Research
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The Consumer Financial Protection Bureau, or the CFPB, has created with the most admirable of intentions: to protect consumers from financial ruin in a volatile market place. However, like every new government program, it became a corrupt political bargaining chip in Obama’s Administration with the sole mission to assert government supremacy over the economy. Thus, CFPB will be a scar on the face of Obama’s so-called “scandal-free” legacy.

CFPB was born from the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, an act that served to, “promote the financial stability of the United States by improving accountability and transparency in the financial system,” and be a response of the Great Recession of 2008. With consumer financial recovery on the mind as the key intention of the agency, the scheme of implementing CFPB’s scope of work, easily, presented a system of unaccountability to malfeasance by agency leaders. Leading, also, into a debate over the constitutional efficacy of the agency’s role in the federal government and the economy.

In the years since, we have seen the agency held to little or no oversight. Due to this, the agency has grown to obstinate size, exceeding its original intended purpose. Looking at the growth of the agency, in terms of employment of staff and agency executives, the agency grew from one of the smallest agencies in government to an everyday bureaucratic paradise. 58 employs skulked the halls of CFPB in the agency’s first year of existence; but, now the agency employs over 1600 consumer protection professionals.

Adding to the ever-growing size, the agency also has been guilty of fostering a negative work culture. Per a congressional inquiry, spearheaded by the Government Accountability Office (GAO), back in June of last year, the agency is an environment of racism and discrimination against nonexecutive employees, based on gender, ethnicity, and sexual orientation.

Nevertheless, the agency has also accumulated a hefty authorization the past several fiscal cycles seeing a growth in authorized funds and growing FTE. Just this past week, several media outlets and leaders of citizen groups have pointed to the CFPB’s financial statements as a highlight to the fiscal over bloating associated with the agency’s operational mission. To begin on this topic, in 2016, CFPB was given over $647 million in authorization appropriations for day to day operations while, simultaneously, taking in an estimated $525 million in civil penalty collections making the agency a $1 billion (and some change) monolith.

Other implicating factors that make CFPB such a scandalous entity also can be seen in the negative effects the agency has had in suppressing and fining financial institutions for questionable offenses. Many times, these punishments are levied on financial institutions without due process, violating the constitutional rights for several corporations and their leaders. To make matters worse, recent litigation suggests that the agency employs corporate bullying tactics similar to that of the Financial Fraud Enforcement Task Force in Operation Choke Point.

One of the other realizations associated with the sentiment that the CFPB is scar on the face of Obama’s “legacy” is that CFPB has been the center of dozens upon dozens of lawsuits and litigation actions for and against the agency, shrouding it in controversy. In effect, the legal headaches also make the agency a legislative headache.

However, the most prominent of all the implications against the CFPB is the astounding cult of personality created around the political aspirations of Richard Cordray, the agency’s director. Because of several structures in the Dodd-Frank legislation, Director Cordray cannot be removed without the President finding malfeasance and neglect during his tenure. Interesting…

Regardless of the opinions for removing Cordray, the only real benefits that CFPB can provide to the financial industry, the federal government’s budget, and the economy is if it were completely eliminated via budgetary de-authorization in any appropriation action from Congress. Essentially, the fall of the CFPB is dependent on the new order of power within the beltway, as well. With the 115th Congress now seated and President-elect Trump to be sworn in later this month, the future of the CFPB is bleak as it rightly should be.

Obama created a bureaucratic, unconstitutional monster. It’s fall is near, and the only remains of CFPB will be the “scandal-free” agency’s short tenure accompanied by 90,000 (plus) pages of failed regulatory reforms.