Post Warren, the Battle Over the CFPB is Far From Over

Handicapping the Chances

What are the chances that any of these bills will actually become law? Here’s the simple answer: Zero. The Republicans may have control of the House. But the Senate and the Oval Office are controlled by Democrats, whose support for the Consumer Financial Protection Bureau has not waned since Dodd-Frank passed a year ago. For emphasis, the Obama administration issued a warning last week, saying the president would veto any budget bill that included cuts to the bureau and other financial regulators.

Watching the bills themselves is “keeping your eye on the wrong ball,” Lamson says. “As long as the Senate remains Democratically controlled, there will be no legislation to survive that would limit further the CFPB.”

That’s not necessarily the whole story, though. Issues much larger than the future of the Consumer Financial Protection Bureau currently dominate Washington, primary among them the entire federal budget and the debt ceiling. In the high-stakes poker game currently being played to resolve these major impasses, all kinds of seemingly unrelated things, like the bureau’s leadership structure, could become chips on the table.

“The big story on the front burner this week is of course the debt ceiling, and any number of things can get thrown into the mix to produce a majority,” Clarke says.

In the larger scheme of things, though, the immediate question of whether any of these bills has a chance of becoming law may be secondary to the larger political battle. Republicans score two forms of political capital by attacking the CFPB, even if those attacks are largely futile in the short-term.

First, appearing to take a tough stand against the creation of a new layer of government bureaucracy solidifies Republican legislators’ relationships with Tea Party activists and other more radical elements of the party who are primarily motivated by the fear of growing taxes an government.

“This is a group that has exercised influence far beyond its numerical strength, in part because it’s so intransigent,” says Christopher Arterton, a professor of political management at George Washington University.

Second, there’s the money. Most Americans are not paying any attention to the ongoing battle over Dodd-Frank and the CFPB, Arterton says.

But one group of people is paying very close attention indeed: The Wall Street bankers and traders whose profits are on the line.

“The audience for this topic may be small, but it is highly influential, full of big campaign donors. Unlike the general public, business is paying close attention,” says Larry Sabato, director of the University of Virginia’s Center for Politics. “They know which party is siding with their interests, and which one isn’t. This will be reflected in money contributed to 2012 campaigns.”

Meanwhile, support for Dodd-Frank may be quite broad, but it doesn’t run very deep. And the Consumer Financial Protection Bureau is just too obscure for most people to know about, many political scientists say.

“It’s a safe bet that a very large majority of the public has no clue about any of this,” says Sabato. “Whenever I have mentioned Dodd-Frank in speeches, even to very well educated crowds, puzzled looks fill the auditorium. So most people never knew it happened.”

That doesn’t mean big changes to the bureau are inevitable. But it does mean that the bureau’s supporters have a lot of work to do. Wall Street firms “have an almost bottomless pit of resources here, and there’s a lot of money at stake, and they’re spending,” Donner says. “And we have incredibly limited resources,” she adds. “It is David versus Goliath, for sure.”

No matter what Donner and her coalition do to maintain the Consumer Financial Protection Bureau in the form originally envisioned by Dodd-Frank, they will have to contend with a large, well-funded and patient opposition that is pushing in the opposite direction.

“I think in this climate right now it would be very difficult to replace the bureau,” says Clarke. “Is it possible to get rid of bureau? Oh I think it’s possible.”

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