Richard Corday appointed director
Today, the Consumer Financial Protection Bureau gets its first director — and its full powers. President Obama gave Richard Cordray a recess appointment that Republicans cannot block.
Relevant and even prescient commentary on news, politics and the economy.
Rdan,
What are its full powers?
And from what I understand the Senate could take this to court since the Senate is still currently ‘in session’, even if not really there.
In any case I would expect this Bureau to disappear if an R wins in Nov. Definitely once again expanding the size and scope of the Federal government.
Islam will change
But, Buff, is it such a bad thing to have regulators overseeing Goldman, Citi, JP Morgan et al.? It wasn’t so long ago that these people relieved me of 30% of my home’s equity and there was absolutely nothing I could do about it. Perfectly legal, or is according to Mr. Blankfein. This whole agency will probably have fewer than 300 employees from top to bottom. The combined salaries of every federal employee involved will be less than a bankster CEO gets in this bonus for one year. One office in the basement of the Rayburn Office Bldg. Not a massive outfit. I’d rather have someone looking over Goldman’s shoulder who’s on my side, ’cause otherwise, they’ll be at it again as soon as they think they they can get away with it. NancyO
I do not know how I feel about the regulation, but I do know it is the law and the GOP has been blocking the appointment for no reason other than not liking the law. That is not democracy under any circumstances. If the regulation is bad and the GOP can convince enough voters that it is bad then they can change the law next January when majorities of both chambers of Congress are controlled by the GOP and the GOP president will sign the repeal into law. Personally, I would trade all of Dodd-Frank for a return to Glass-Steagall. The idea that European banks would eat the lunch of U.S. commercial banks if Glass Steagall was put back in place seems to make as much sense as supply side economics.
Nancy,
My response would be – where is the IRS? What law is the FBI or IRS not enforcing that Goldman et al are violating? Does the FBI not have a white collar crime division? Is the IRS unable to investigate and prosecute tax evasion? Why do we need 300 more Federal emplyees in a new organization? Why not add to existing organizations who already have the job of policing this? Heck companies like Goldman and their senior employees should be audited every year by the IRS.
I have no problem with more oversight of the banks. I see no reason to add to the Fed org chart.
And the previous rules were mostly eliminated in the go-go late 90s. Call me Holder indicts the orangeman (Countrywide CEO).
As for your home. You never had that equity in the first place. It was a mirage, just like the tulip bubble a few centuries ago. You house was never worth either what you thought it was or what you paid for it. And the banks did not devalue your home. Just no one was going to pay bubble prices for it any longer. In any area (with some exceptions like downtown NYC) the median home value should be 2.3-3.0 times the median yearly income of the area. Anything greater is bubble pricing – and that information is out there and easily found (even before the bubble). But everyone believed its ‘different this time’.
Islam will change
terry,
“I would trade all of Dodd-Frank for a return to Glass-Steagall.”
So would I.
Essentially without the director the CPB could only continue to fine tune regulations it took over. One area is the regulation of mortgage brokers, payday lenders and in general non bank actors in the financial area. Essentially it was the areas that Dodd Frank added to regulations.
buff, theres something of a summary here: Learn about the Bureau
The central mission of the Consumer Financial Protection Bureau (CFPB) is to make markets for consumer financial products and services work for Americans—whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”[5] The jurisdiction of the bureau includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors and other financial companies, and its most pressing concerns are mortgages, credit cards and student loans.
the inspiration was to change the typical 20 pages of legalise small print into one page of readable english in consumer documents…
Buffy, the powers of the CFPB were once held by the Office of the Comptroller of the Currency and by the Federal Reserve Board. Both pointed the fingers at each other when it came to the problem of inadequate regulation of lending activities, and both had conflicts of interest that precluded them effectively regulating lending activities since neither had as their primary responsibility the protection of consumers. If your notion is that these bodies should have been required to effectively regulate lending activities in order to prevent fraud and abuse, well, that’s a great notion — but it’s a notion that did not work in actual practice. When ideology meets reality, reality wins, and reality is the the OCC and FRB simply weren’t effective at protecting consumers from abusive practices, thus why the CFPB was created from pieces of each (and nominally placed under the FRB’s jurisdiction, but effectively independent in much the same way as the EPA, OSHA, etc.).
Bad Tux,
So instead of firing people for not doing their jobs, we hire more people to do jobs that others should have been doing in the first place. If the CFPB was created from parts of the OCC and FRB did those two organizations transfer staff and budget to the CFPB (or better fire the staff that did not do their jobs previously and send the budget and staff position – sans staff – to the CFPB)?? My bet is we added 300 people to the Fed to do jobs that other Feds were not doing, and not one person lost a job that they were unwilling to actually do.
And like my response below to Nancy – where is the FBI in all this? or, if applicable, the IRS? If Holder can find time to run guns to the Mexican Drug cartels don’t you think he would have time to go after Countrywide? If the laws were broken, then where are the guys with the handcuffs?
rjs – Thanks for the links. I didn’t read it all, but I’m not sure what the organization is going to be able to accomplish. How many audits per year will it be doing on banks and mortgage lenders? The biggest mortgage lender in the US is Freddie and Fanny. What are is the CFPB position related to those bank? The largest student loan lender is the US Gov, using banks as basically middlemen to service the loan. The US Gov through the IRS is the enforcement and collection arm for these loans if they go delinquent. They can even confiscate SS payments to repay student debt (so much for SS being old age insurance). What’s there regulatory authority to change those rules or make student debt dischargeable in bankruptcy? (Yea, I know – they have no authority).
Bottom line: I see an organization that will just insure the banks use 32 point bold type to make sure that when you sign an ARM you understand that the payments could really and truly triple depending on the Libor rate. (Why does ANYONE buy a house without a lawyer is beyond me). Or will ensure that students know that when they sign a student loan at age 18 to pay $100,000 to spend 5 years earning a degree in womyn’s studies that the IRS will hound them for the rest of their life to repay that loan. Do I get that right?
Islam will change
Once upon a time this blog and its commenters fretted over the “unitary executive”. I don’t see too much of that any more. Maybe since Yoo is at UCB everything is OK.
But this isn’t a case of a unitary executive, this is a case of archaic rules in the Senate preventing the majority from confirming *any* person to fill this position. The majority of Senators support the Corday appointment and would vote to confirm him if given the opportunity to do so (the cloture vote shows that). In a sense the “advice and consent of the Senate” provision has been fulfilled here, it is only pro forma procedural nonsense by a minority that has prevented the proper operation of said august legislative body.