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The Swamp Moves To Keep Its Power At The Consumer Financial Protection Bureau

There’s another showdown brewing between President Donald Trump and the swamp – the management transition at the Consumer Financial Protection Bureau.

The CFPB – an agency that many thought was unconstitutional* when Democrats created it in 2010 as part of the Dodd – Frank financial services regulation bill – has been an abysmal failure in its stated mission of CFPB Power Struggleprotecting the consumers of financial services.

Rep. Jeb Hensarling (TX-5), who fought a valiant rearguard action against the bill in the then-Democrat controlled House calls the CFPB “the single most powerful and least accountable federal agency” in the government.

Hensarling has said that the regulatory overreach in Dodd-Frank is also the reason that one out of five credit-worthy borrowers in 2010 could not qualify for a loan in 2016, and why banks have raised fees to the point that a rising number of Americans can no longer afford to maintain a bank account. Before Dodd-Frank, 75 percent of banks offered free checking. Half of those now charge fees.

The Competitive Enterprise Institute’s Prof. Todd Zywicki, testified before the House Financial Services Committee about the harmful effects of the Dodd-Frank Act, which “imposed a regime that instead has led to higher prices, less innovation, and less choice” in “mortgages, bank accounts, and credit cards,” increasing “consumer dependence on less preferred products like payday loans, pawn shops, and check cashers.”

Indeed, CEI attorney Hans Bader quotes Cato Institute’s Walter Olson in an article for CNS documenting that in the first five years of the existence of the CFPB only one new bank was created in the entire country: “Based in a rural village in the heart of Amish country, Bank of Bird-in-Hand is the only new bank to open in the U.S. since 2010, when the Dodd-Frank law was passed and enacted. An average of more than 100 new banks a year opened in the three decades before Dodd-Frank.”

Bader also quotes Iain Murray of the Competitive Enterprise Institute (CEI) who has noted, “rules issued under Dodd-Frank have harmed some of the poorest Americans, who have seen their insurance made more expensive, their banking choices reduced, and their bank fees increased. Many have been forced out of the banking system altogether” potentially leading to the return of “loan sharks.”

And now, the same Far Left Democrat activists who brought these failures upon the American people want to hold on to their power in another unconstitutional move.

Upon the resignation of the CFPB’s Director, Far Left Democrat Richard Cordray President Trump appointed Office of Management and Budget Director Mick Mulvaney as Acting Director of the Bureau.

The LA Times’ Jim Puzzanghera reports that the White House said Sunday night that the president had the authority to appoint Mulvaney to serve as acting director until a permanent choice is nominated and confirmed by the Senate. White House Press Secretary Sarah Huckabee Sanders noted the Justice Department’s Office of Legal Counsel agreed with the administration’s interpretation of the law as did the bureau’s general counsel, Mary McLeod.

McLeod sent a memo to the bureau’s senior leadership team on Saturday that it was her opinion that Trump has the authority to appoint an acting director, and she advised agency personnel “to act consistently with the understanding that Director Mulvaney is the acting director of the CFPB,” reported Puzzanghera.

However, Cordray purported to appoint his Far Left ally Consumer Financial Protection Bureau chief of staff Leandra English as Acting Director, and English then filed suit claiming she is the “rightful acting director” in the wake of former director Richard Cordray’s departure.

U.S. District Judge Timothy Kelly, one of two newly confirmed Trump appointees on the D.C. court, is slated to take up the case, however it is unclear as of this writing when he will issue a ruling.

According to The Washington Post, Mulvaney and English even sent out dueling email messages to CFPB’s likely befuddled 1,600 employees. English said in her message, “I hope that everyone had a great Thanksgiving. With Thanksgiving in mind, I wanted to take a moment to share my gratitude to all of you for your service.” English ended the note with her claimed title: “Acting Director.”

Shortly after, Mulvaney, already in the director’s office, according to photos taken by his staff, responded with his own email.

“It has come to my attention that Ms. English has reached out to many of you this morning via email in an attempt to exercise certain duties of the Acting Director. This is unfortunate but, in the atmosphere of the day, probably not unexpected,” he said according to reporting by The Washington Post’s Renae Merle.

“Please disregard any instructions you receive from Ms. English in her presumed capacity as acting director.” Mulvaney also asked CFPB employees to report any additional professional communications from English to the general counsel’s office reported The Washington Post’s Ms. Merle.

Congressman Jeb Hensarling had it right back in 2010 when he fought tooth and nail to stop the creation of the CFPB; it is “the single most powerful and least accountable federal agency” in the government.

The Constitution is clear that the President is head of the Executive Branch of government, and as such the appointment of Mick Mulvaney as Acting Director is a welcome, and constitutional, step toward restoring the accountability and transparency that was missing when the CFPB was created.

*The constitutional status of the CFPB has been the subject of several court cases. In PHH Corp. v CFPB, a case decided in October 2016, the U.S. Court of Appeals for the District of Columbia found the CFPB’s structure to be unconstitutional because its director could not be removed at will by the president.

CHQ Editor George Rasley served as Director of Communications for Rep. Jeb Hensarling (TX-5) during the debate and passage of The Dodd–Frank Wall Street Reform and Consumer Protection Act that created the Consumer Financial Protection Bureau.

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This agency is worthless.

I have had a problem with Regulation Z and the grace period that is being violated by lenders that I have notified the State Attorney General and CFPB about repeatedly. The mortgage companies have found a work around in the law, (or more appropriately a lack of attention by the regulatory agency to those accountable to follow this law and its interpretation that is clearly defined and addressed by the regulation). The lenders have used this opportunity to invalidate that regulation that is suppose to protect consumers from predatory practices by lenders.

Being a retired CPA, BSA, programmer I have been basically on my own fighting this practice for decades. The CFPB has heard from me twice about provable and illegal violations to this regulation that clearly covers the predatory practice I noted in my documentation but all this group does is file the complaint and the offender response then moves on. Nothing further is done and these violations are never investigated or stopped.

As a retired person with a proper background to assess this injustice, I have been far from impressed with the lack of attention or action to protect consumers from these predators and the total lack of response to stop an easy to prove violation of this regulation.

Please tell me what this agency in 2010 was truly created to do? Certainly it does not protect the consumers or make sure the proper agency who should be policing this type of business entities practices to prevent violations such as the one I have clearly seen, identified and proved.