Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Friday, March 03, 2017

Republican senators start attack on US consumer financial watchdog

Republicans lawmakers are starting to put in motion plans to destroy or defang the U.S. agency intended to protect individuals from financial fraud.

On Tuesday, two Texas Republicans, Senator Ted Cruz and Representative John Ratcliffe, introduced a one-page bill to kill the Consumer Financial Protection Bureau entirely.

Their move comes a few days after Representative Jed Hensarling, the chairman of the House Financial Services Committee, outlined a plan to limit the independent agency’s power and to crimp its funding via Congress’ budget process.

The agency focuses on financial products such as mortgages and student loans.

Next up: David Perdue, a Republican from Georgia on the Senate Banking Committee, will introduce a bill to make the CFPB more accountable to Congress by changing its funding mechanism, according to an aide. Unlike a complete elimination of the agency, which would require 60 votes, Perdue’s bill could be affixed to budget legislation that could become law with a 51-vote majority vote in the Senate.

Senate Democrats, including Elizabeth Warren from Massachusetts and Sherrod Brown, the senior Democrat on the Banking Committee, have vowed to block changes they say would weaken the CFPB’s independence.

Killing the agency altogether would be a hard sell, and even some banking lobbyists have said they would be comfortable with a more restricted CFPB.

The agency, which is also facing a court test, was created in the 2010 Dodd-Frank Wall Street reform law. Its sole director, currently Richard Cordray, serves a fixed term and its budget flows through the Federal Reserve without being subject to congressional review.

Republicans criticizing the CFPB say it overreaches its authority, pushes unnecessary regulation on small banks and uses large fines to direct lenders’ behavior without going through proper rule-making processes. Perdue has also struck at the agency more specifically, introducing a resolution to repeal a new CFPB regulation requiring prepaid cards to disclose their terms prominently.

Hensarling’s plan, which anti-CFPB lobbyists and congressional staffers are positing as a compromise, would push some CFPB powers to other agencies while making its budget subject to congressional review and its director a political appointee. Others want to see the agency become a five-member bipartisan commission.

President Donald Trump, also a Republican, was elected partly on promises to lighten regulation and is expected to sign any CFPB-related legislation that reaches his desk.

Original Article
Author: Reporting by Lisa Lambert; Editing by Linda Stern and Dan Grebler

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