Dodd-Frank Bureaucracy Over Site: Boehner’s Big Win
One of the most important gains that John Boehner garnered in this week’s budget deal is an agreement from Harry Reid and the White House that the new bureaucracy created under Dodd-Frank, the Consumer Financial Protection Bureau (CFPA), will now be subject to mandatory audits.
MANDATORY AUDITS OF THE NEW JOB-CRUSHING BUREAUCRACY SET UP UNDER DODD-FRANK. The agreement subjects the so-called Consumer Financial Protection Bureau created by the job-destroying Dodd-Frank law to yearly audits by both the private sector and the Government Accountability Office (GAO) to monitor its impact on the economy, including its impact on jobs, by examining whether sound cost-benefit analysis are being used with rulemakings.
This agency is headed up by radical leftist Progressive Elizabeth Warren who has so far avoided any confirmation process and was instead appointed as a ‘special adviser’ (read Czar) to oversee the creation of the agency although she is clearly running things.
For starters, what should be disconcerting to everyone is that the man who recommended the White House hire Warren for the job is Stephen Lerner. He was recently exposed as SEIU big-wig who wants to initiate a second financial meltdown and specifically target JP Morgan Chase for destruction. He’s also visited the White House at least four times and, according to Glenn Beck, has had meetings with Elizabeth Warren at the Treasury Department as recently as last December to discuss implementation of the financial reform bill.
But that’s not all.
The CPFA, which is slated to begin operating in July of this year, will regulate banks and firms, including mortgage brokers, payday lenders and credit unions; examine banks and credit unions with assets of more than $10 billion; and oversee certain other non-bank financial firms. The bureau could impose fines or ask courts to order relief.
A scathing editorial in the WSJ titled “The Incredible Ms. Warren writes (emphasis mine):
The bureau [CFPA] is part of the Federal Reserve System, but the Dodd-Frank law that created it explicitly says that Fed Governors can’t “intervene” in the bureau’s functioning, “appoint, direct or remove any officer or employee” or “merge or consolidate the bureau . . . with any division or office of the Board of Governors or the Federal Reserve Banks.” So while the bureau is part of the Fed, it isn’t at all accountable to anyone at the Fed.
It goes on to describe Warren’s obfuscation of the truth in which she told Congress that the bureau is “the only agency whose rules can be overruled, obliterated, wiped out, and negated by other agencies.”:
A bureau rule may only be overturned if it endangers the “safety and soundness of the United States banking system or the stability of the financial system of the United States.” How often do you think an Administration’s financial bureaucrats will risk pulling that five-alarm-fire reason for killing a rule? The first time a consumer bureau director leaks to her media retinue that someone in government is trying to “protect the big banks,” her fellow regulators will run for cover.
CFPA is projected to employ the equivalent of more than 1,200 full-time employees in 2012, and its budget is provided from Federal Reserve funds without a need for approval by Congress. Dodd-Frank law allows her to set her own budget based on a percentage of the earnings of the Fed, which MUST hand over the funds without question. There is no Congressional appropriation whatsoever and the budget cannot be reduced.
In another WSJ article:
“[T]his unprecedented lack of accountability is by Ms. Warren’s design. The bureau was the Harvard professor’s idea, and she lobbied the Obama Administration and Congress to make it part of the 2010 Dodd-Frank financial reform.”
For a clearer picture of this Harvard educated elitist (to the point of insulting), read Warren’s own words from a lengthy 2007 article in which she promotes her grand scheme to save all of us from ourselves.
She believes that if home-buyers had only understood the fine print on their mortgages, they would not have bought houses they couldn’t afford. Or, if their credit card contracts had been written in plainer language, they wouldn’t have charged so much.
Her goal for the CPFA is to regulate “dangerous credit products” in the same manner that toasters and other potentially harmful kitchen appliances are regulated by the Consumer Product Safety Commission (CPSC). According to their website, the CPSC is charged with “protecting the public from unreasonable risks of injury or death from thousands of types of consumer products” such as toys, cribs, power tools, cigarette lighters, and household chemicals.”
But, the difference between your credit card and your toaster, from Warren’s typical class-warfare perspective, is that these “dangerous credit products” only hurt the poor and middle class (emphasis mine):
“If toasters are dangerous, they may burn down the homes of rich people or poor people, college graduates or high-school dropouts. But credit products are not nearly so egalitarian. Wealthy families can ignore the tricks and traps associated with credit card debt, secure in the knowledge that they won’t need to turn to credit to get through a rough patch.
Working- and middle-class families are far less insulated. For the family who lives closer to the economic margin, a credit card with an interest rate that unexpectedly escalates to 29.99 percent or misplaced trust in a broker who recommends a high-priced mortgage can push a family into a downward economic spiral from which it may never recover.”
Correct me if I’m wrong but my understanding is that a credit card rate only “unexpectedly escalates” when you’ve not met the terms that were agreed upon when the card was issued. Like, say for instance, when you miss or are late on your payment.
Warren has even gone so far as to insert herself (even though her agency will not be functional until July) into the DOJ’s ongoing mortgage settlement negotiations although she claims she was asked to do so as an adviser. Under the settlement banks will be forced to write down mortgage principles in order to punish them and redistribute another $20 billion to voters before the 2012 election.
House Financial Service Committee chair Rep. Spencer Bachus (R-AL) has introduced a bill that would replace the CPFA director position at the bureau with a five-member commission. Chamber of Commerce president Tom Donahue agrees:
“We think a bipartisan five-person commission would provide a lot more balance and accountability in the bureau’s management than a single powerful director.”
We can agree or disagree about whether Speaker Boehner’s $38.5 Billion bottom line amount in cuts is a win for Republicans. But the over site he gained of radical leftist Progressive Elizabeth Warren is certainly a win for America.