In Defense of Consumer Protection

The Minority Leader of the U.S. Senate, Mitch McConnell (R-KY) wants to prevent President Obama from appointing Elizabeth Warren, Raj Date (or frankly anyone other than the ghost of Adam Smith or Old Man Potter from “It’s a Wonderful Life”) to be the Director of the newly created Consumer Financial Protection Bureau unless and until Democratic leaders agree to essentially defang the agency and permit Congressional oversight and authorization of its budget. He has convinced 44 of his closest Republican friends in the Senate to go along with him.

The head of the U.S. Chamber of Commerce, you know, the guys who are always looking out for the American consumer, has stated that the CFPB is “the most powerful agency ever created” and pretty much implied that Congress may have to destroy it to save his village. It seems crazy that more than a year after passage of the Dodd-Frank Act that created it, and weeks before it officially opens its doors, the CFPB must continue to justify and defend itself, given the financial FUBAR confronting our nation. However, as long as Sen. McConnell and his colleagues are intent on taking the disruptive course and have a platform to do it, we must continue to point out why there is a very real need for the agency and that efforts to kill it are counter-productive for our country and our economy. So, here we go again.

This weekend I had the privilege of interviewing Holly Petraeus, the newly appointed head of the Office of Service Member affairs of the CFPB, on my weekly radio show on LA station KFWB (AM 980), about how she intends to protect our military families against those financial predators who profit from the distractions of their deployment and the vulnerabilities of their financial illiteracy. Her mission, while critical to our national defense and our economy, is but one of a number of vitally important tasks charged to the CFPB.

Like Elizabeth Warren, Mrs. Petraeus is a dedicated, brilliant, doggedly-determined consumer advocate who has spent much of her life protecting the men and women who defend our nation. She is 4th-generation military and her husband, General David Petraeus, was the commander of all U.S. forces in Iraq, runs the war in Afghanistan and is about to become the next Director of the CIA. You’d think Senator McConnell and his minions wouldn’t want to mess with her. Unfortunately, the fact that she isn’t a politician and is singularly focused on the demanding job of protecting men and women in uniform from economic vultures is sadly working in the Senator’s favor. She’s so busy protecting people that she doesn’t have time to justify her work protecting people.

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The message that seems to be lost on those who oppose the CFPB is that we are in as much of a dogfight on the domestic front as we are with terrorists around the world. We are at war against financial predators and financial illiteracy. And the rules of engagement are as muddy in Maine, New York, Kentucky, Indiana, Montana and California as they are half a world away, because it’s getting harder to distinguish the good guys from the bad guys.

Every day, American consumers, military and civilian alike, are being viciously attacked by those who would take advantage of our lack of financial skills, scam us and steal our identities. Every day, we learn of new abuses by financial institutions (loan modification programs that deceive and destroy, foreclosure mills that have shifted into overdrive again and fee frenzy part two), the breach of the week (SONY, Epsilon, Citibank, Bank of America, the IMF and the U.S. Senate to name a few) and the seeming powerlessness of government to do anything about it (the HAMP Program has been a disaster, the economy is sliding south again and hackers are running wild).

In Defense of Consumer Protection (cont.) »

Image: Consumer Financial Protection Bureau, via Flickr.com