I am an unapologetic advocate for the Consumer Financial Protection Bureau, which was created in the wake of a crippling financial crisis that I fear is becoming a distant memory.
But we have to remember: It was not that long ago when financial institutions did some funky stuff that pushed us into the Great Recession.
Now the agency designed to protect consumers — yes, sometimes even from themselves — is a hot mess.
The director of the CFPB, Richard Cordray, stepped down last week, and now there’s a fierce fight to see who will temporarily take his place until a permanent leader is nominated and confirmed.
President Trump appointed Mick Mulvaney as acting director, even though Mulvaney already has another day job — as head of the Office of Management and Budget. Trump’s motives seem clear: Weaken the agency by sending in Mulvaney, a former congressman who voted to abolish the agency.
Leandra English, who was named acting director by Cordray shortly before he left office, filed a lawsuit Sunday to block Mulvaney’s appointment. On Tuesday, a federal judge ruled against her. Her attorney is now considering additional legal steps.
This battle for the CFPB leadership is like watching a train derailment. But make no mistake, folks: We are on this train, too. It’s our interests that will be tossed to the side when the train stops skidding.
Even if English is ultimately successful in her lawsuit, the CFPB, under the current administration, won’t be what it was intended to be: a tough advocate for consumers. Mulvaney said as much.
“Anybody who thinks that a Trump administration CFPB would be the same as an Obama administration CFPB is simply being naive,” he said at a news conference. “Elections have consequences.”
Despite the naysayers, the CFPB is like a caped crusader standing in the path of predatory practices.
At the most basic level, the agency is working to ensure that the financial industry is adequately informing you about what products and services you’re being sold. Yet the agency has been vilified from Day 1 for this mission by Republicans. Here are the two main arguments in favor of derailing the CFPB:
Businesses can’t make enough money off consumers. Already, Mulvaney has issued a 30-day freeze on new regulations. Why? To make sure there isn’t a “choking off” of financial services.
Think about this for a minute. Not even a week into the job, and Mulvaney is putting the interests of corporations ahead of consumers.
We are already a nation of debtors. That’s part of the reason we fell into a recession. Everybody and their mama could get a loan.
Some argue that Mama should get the loan she wants. It’s her choice. Except we all pay when people are saddled with debt they can’t afford. Surely you haven’t forgotten the Wall Street bailout?
Congress can’t control the agency’s budget. The CFPB funding comes from the Federal Reserve, and it was set up that way to purposefully avoid partisan meddling and influence peddling by the financial industry, which the agency is charged to police.
The crusade against the CFPB has become so clever that I get emails like this one from a reader: “If I understand correctly, you are advocating for Uncle Sam to tell a grown woman what she can or cannot buy with her own money? If the lender is truthful and the woman is of sound mind, the government needs to stay quiet.”
There was no question about that “if.” Some companies weren’t — and aren’t — truthful. It was state and federal oversight that finally caught Wells Fargo, which was found to have opened millions of unauthorized bank and credit card accounts.
The CFPB isn’t telling people what they can do with their money. It’s simply making sure that companies clearly disclose information people need to make better financial decisions.
Partisan politics aside, please remember why the agency came about. It was part of the Dodd-Frank Act and was directed to look at the rules governing credit cards, mortgages, student loans and other financial products aimed at consumers. We needed a superhero to put us back on track.
In a tweet Monday, the Leadership Conference on Civil and Human Rights wrote, “If the 2008 financial crisis showed us anything, it’s that consumers need and deserve a strong and independent regulator to look after the interests of American consumers. #DefendCFPB”
Take to Twitter, the forum we know Trump values. Use the #DefendCFPB hashtag and let your voice to be heard. If you don’t speak up in defense of this agency, you will lose an important watchdog for financial fairness.
Readers may write to Michelle Singletary at The Washington Post, 1301 K St. NW, Washington, D.C. 20071 or firstname.lastname@example.org. To read previous Color of Money columns, go to http://wapo.st/michelle-singletary.