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Is Money Being Wasted at Agency Intended to Protect Consumers’ Dime?

Cost-benefit analysis of CFPB rules, argues one Dem, would just feed GOP's "ideologically-driven regulatory agenda.”

by
Rodrigo Sermeño

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April 21, 2014 - 11:03 pm
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WASHINGTON – Republicans continue to launch complaints about the Consumer Financial Protection Bureau’s (CFPB) rulemaking and regulation enforcement, saying the agency needs more transparency and cost-benefit analysis of rules.

Meredith Fuchs, CFPB general counsel, testified before the House Financial Services Committee along with officials from the Federal Insurance Corporation, Federal Reserve, National Credit Union Association, and Office of the Comptroller of the Currency.

While the hearing was intended to examine the economic consequences of regulatory action by these federal agencies, CFPB was the main focus of the hearing.

Committee Chairman Jeb Hensarling (R-Texas) said the CFPB should refrain from new adopting regulations unless it determines that the benefits of the rules outweigh their costs.

Many Democrats on the committee have opposed cost-benefit analysis of legislation, calling it “dangerous.” They argue that cost-benefit analysis would hinder the work of regulators and roll back some of the Dodd-Frank Act provisions.

“Democrats have harshly criticized cost-benefit analysis. Looking at the pluses and minuses of a rule, the impact on jobs, asking the question whether a rule on balance helps or harms hardworking, struggling American families,” Hensarling said. “I believe what is ‘dangerous’ is sweeping under the rug the mounting evidence that many rules promulgated under Dodd-Frank Act and its ideological precursor, the CARD Act, are harming consumers.”

Rep. Maxine Waters (D-Calif.), who is a strong supporter of the CFPB, said cost-benefit requirements do nothing more than “undercut the ability of our regulators to do their jobs.” She called the hearing “the latest chance for the majority to air its ideologically-driven regulatory agenda.”

Waters defended federal regulators for putting the financial system on a more stable footing after the recent financial crisis.

“Excessive borrowing, risky investments…put us on the path to crisis — not federal regulators,” the California Democrat said. “Although Washington had a role to play, it certainly was not because regulators erred on the side of overregulation.”

The CFPB was created as part of Dodd-Frank in response to the 2007 financial crisis. The bureau was established to regulate financial markets for consumer financial products and services.

Since the CFPB’s inception, Republicans have tried to rein in the bureau by passing legislation and by attacking the agency on various fronts, including the CFPB’s mortgage-lending rules, its push to combat auto-lending discrimination, and its lack of transparency.

The CFPB announced last year that it would hold accountable lenders that offer auto loans through dealerships that are caught charging higher variable interest rates to minorities, women, or other protected classes of buyers.

According to a report by the Center for Responsible Lending, dealers in many cases charge black and Latino borrowers higher rates than white borrowers who have the same or similar incomes and credit scores.

The CFPB relies on disparate impact theory to determine whether unintentional discrimination has taken place.

Members of the panel wondered how the CFPB could impose a discrimination standard on lenders, while at the same time facing accusations of widespread racial and gender-based discrimination within the agency.

“You certainly create the impression that you are trying to impose a standard on others that you can’t live up to yourself,” Hensarling said.

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Top Rated Comments   
The CFPB is a great example of how compromising with the Democrats creates Frankenstein outcomes. When this bastardized agency was created the Republicans blocked it for a time protesting rightfully that the Agency was set up to operate without oversite and be part of the Federal Reserve instead of the Executive Branch of government. So what you say? How about the fact that no one knows how much money these fools spend, how much their fat assed managers make, what their regulatory scope is etc. They are completely independent and come up to the hill from time to time to thumb their noses at some BS committee that can do nothing to stop them. Sort of like the IRS coming up to piss on Issa during his hearings. You want a good reason to limit the size of government? Well this rogue agency is a poster child for corrupt and unaccountable government. Apparently David Petreus's wife got a cool job with them at about $250K a year as a partial payoff for sticking his head up his ass during the Benghazi scandal. Anyway this agency in my view flouts the constitution and congressional oversight and should be shut down. It is nothing but a politicized tool to torment consumers and financial institutions with socialist if not marxists tendencies. In other words walking in lock step with Obama and his gang of thugs and dictators in government.
18 weeks ago
18 weeks ago Link To Comment
All Comments   (8)
All Comments   (8)
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17 weeks ago
17 weeks ago Link To Comment
The CFPB is the only thing that has survived the effort to re-regulate the financial industry after the greedy stupidity of the run-up to the recession. The "Volker Rule" is now a "half a Volker Rule". The Dodd-Frank legislation wasn't agile enough to "Doddge" the bullets and didn't present a "Frank" enough regulatory environment.

Enough humor. Hensarling can only be explained by Dick Armey. He's a well greased politician bought and paid for by businesses that don't want to be prevented from cheating and defrauding the public without interference. Issa just can't get past the idiot stage. If allowed that group would have us sold out to corporate slave owners before the next election. I can only guess folks who think any of their crap is right is either so ideologically warped as to support anything not Obama, Democrat or whatever. I guess they don't pay attention when they get screwed by a large business or are just so ideologically numbed they don't notice. These are folks who think price-fixing by healthcare insurers with immunity from prosecution is fine because the anti-trust exemption is only for gathering and exchanging data on their business. Now that's what my Republican Congressman told me when I asked about the exemption. He's in a neighboring District to Hensarling's. I won't go into the list of anti-consumer positions they take. And the Republican's ideas for Insurance across State lines will produce no differences. Everyone of those Companies can sell health insurance in any State they wish to. I hate being told BS too.

The cost-benefit analysis is nothing more than a tactic to try to stall adoption of regulation. Who is the cost-benefit analysis supposed to be for, business or the consumer. I'm betting the consumer is not the beneficiary of the analysis they want. Businesses will scream bloody murder about how much it will cost them while the ripped-off consumer will receive no consideration. I live in the State of business is all and consumers are leeches to be tolerated. I'm not sure who buy's their product, but I can tell you who's getting screwed.
18 weeks ago
18 weeks ago Link To Comment
"Rep. Maxine Waters (D-Calif.), who is a strong supporter of the CFPB, said cost-benefit requirements do nothing more than “undercut the ability of our regulators to do their jobs.” She called the hearing “the latest chance for the majority to air its ideologically-driven regulatory agenda.”

In other words, "Facts? FACTS? We don' need no steenking facts!"

18 weeks ago
18 weeks ago Link To Comment
"cost-benefit analysis would hinder the work of regulators"

That's a feature not a bug.

'She called the hearing “the latest chance for the majority to air its ideologically-driven regulatory agenda.”'

We won. Majority rules. You made you bed, now lie in it, fascists.
18 weeks ago
18 weeks ago Link To Comment
Is money being wasted in the government?

Is the Pope Catholic?
  
18 weeks ago
18 weeks ago Link To Comment
The CFPB is a great example of how compromising with the Democrats creates Frankenstein outcomes. When this bastardized agency was created the Republicans blocked it for a time protesting rightfully that the Agency was set up to operate without oversite and be part of the Federal Reserve instead of the Executive Branch of government. So what you say? How about the fact that no one knows how much money these fools spend, how much their fat assed managers make, what their regulatory scope is etc. They are completely independent and come up to the hill from time to time to thumb their noses at some BS committee that can do nothing to stop them. Sort of like the IRS coming up to piss on Issa during his hearings. You want a good reason to limit the size of government? Well this rogue agency is a poster child for corrupt and unaccountable government. Apparently David Petreus's wife got a cool job with them at about $250K a year as a partial payoff for sticking his head up his ass during the Benghazi scandal. Anyway this agency in my view flouts the constitution and congressional oversight and should be shut down. It is nothing but a politicized tool to torment consumers and financial institutions with socialist if not marxists tendencies. In other words walking in lock step with Obama and his gang of thugs and dictators in government.
18 weeks ago
18 weeks ago Link To Comment
Amen! Another step in the coup by Softshirts.
18 weeks ago
18 weeks ago Link To Comment
CFPB has regulated Wall St into a fountain of money for DC!
18 weeks ago
18 weeks ago Link To Comment
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