The CFPB and Congress’ Need for an Adult Conversation

An Adult Conversation

Republicans are pulling out all the stops in the hopes that they’ll kill the CFPB before it really gets going, raising issues about CFPB employees consulting with state attorneys general who are trying to eliminate fraud from the mortgage servicing business; about how the CFPB is funded. It all seems quite petty. The law establishing the CFPB was drafted to shield it from Congressional tampering and as advertised, Republican Members of the House are trying to tamper with it—limiting its funding and working to undermine the woman who fought for it and is working hard to turn the concept into a reality.

Ultimately, there wasn’t a particular theme to the questioning—rather it was more like a series of snipes. It seemed to me that they were trying to take her down by any means necessary. Actually, now that I think about it, there was a theme: political suicide. The sniping from rank and file Republicans on the Financial Services Committee may be political theater, but they ought to consider the real world ramifications of taking this approach.

As Rep. Barney Frank (D-MA), the former Chairman of the House Financial Services Committee, pointed out on Monday’s Morning Joe, “This is not just the left and the right. The Republican Party is united against healthcare and united against the environment. They’re not united against financial reform. The Tea Party people didn’t send people to Washington to defend derivatives. I think the fight over Elizabeth Warren would be worth having and I’m not sure how all the Republican senators would vote.”

[Article: The GOP’s Plans for Financial Reform]

I agree with him. I think this is an issue that crosses party lines and that, broadly speaking, the American people see through the rhetoric. They want someone out there watching their backs, who’s smart enough and tough enough to take on the financial services industry when they step out of line. Now who do you think is better suited for that job: Congress or Elizabeth Warren?

I frankly don’t understand why Republicans don’t support Elizabeth Warren. And please don’t give me the Tea Party mantra about how the world would be perfect if only government would get out of our lives. Instead of trying to find a way to work with her to protect consumers—and last time I checked, these politicians “represent” and, in fact, are consumers—they want to demonize her and strangle the newly created CFPB.

I am not an unreasonable guy. I don’t disagree with Rep. Capito’s recently stated objection to Warren’s overuse of the phrase “cop on the beat,” which is a pretty considerable admission coming from a guy who loves a good catch phrase. However, it does accurately describe what we have lacked heretofore and so sorely need today.

Here are some of the most important things Elizabeth Warren wants to do. Can any reasonable person oppose them?

Prohibiting mortgage brokers from making greater commissions by steering borrowers to more complex financial roach motels of hi-bred adjustable financial instruments.
Raising the bar for America’s financial literacy.
Mandating shorter, more easily understandable mortgage and credit card contracts.

Isn’t an educated, financially hip, less risky borrower who tells the truth about his or her ability to pay and actually does pay better for our financial system? Isn’t it time for the “Gotcha” conduct of financial relationships to be replaced by civility, transparency and fairness? In a world where supermarkets are mandated to unit price a can of peas, how it is possible that banks have yet to offer a unit price for a credit card?

We have a golden opportunity to finally do something right for the American consumer by not only saying that we are making institutions more accountable to us but actually making them more accountable to us. Isn’t that the battle cry of the Tea Party?

Let’s all try to have an adult moment here. The financial system needed something far more structured and lasting than Congress simply consigning banks and credit card companies to a few minutes in the regulatory time-out chair. Elizabeth Warren and her team at the CFPB are doing the job that American consumers want and need them to do. Perhaps instead of sniping from the cheap seats, Congressional critics might give them some slack and allow a work in progress to progress.