A Government Agency Outside the Law
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“By creating a CFPB that floats above the Constitution’s tripartite design of government, Congress did not merely degrade itself, it injured all Americans.”
Washington Post columnist George Will takes a hard look at the Consumer Financial Protection Bureau in his column this week, criticizing the agency’s unchecked funding and lack of transparent standards.
He looks at the CFPB’s budget that lacks transparency because it doesn’t require congressional approval:
One CFPB request for $94 million in Federal Reserve funds was made on a single sheet of paper. Its 2012 budget estimated $130 million for — this is the full explanation — ‘other services.’ So it has been hiring promiscuously and paying its hires lavishly: As of three months ago, approximately 60 percent of its then 958 employees were making more than $100,000 a year.
Will also argues that the CFPB needs to clarify what “abusive” means in the eyes of the bureau:
Law is supposed to give people due notice of what is proscribed or prescribed, and developed law does so concerning “unfair” and “deceptive” practices. Not so, “abusive.” The term, Cordray concedes, is “a little bit of a puzzle.” An “abusive” practice may not be unfair or deceptive yet nonetheless may be illegal. It is illegal, the law says, if it “interferes with” a consumer’s ability to “understand” a financial product, or takes “unreasonable” advantage of a consumer’s lack of understanding, or exploits “the inability of the consumer to protect” his or her interests regarding a financial product. This fog of indeterminate liabilities is causing some banks to exit the consumer mortgage business.
To read the complete column, click over to Washington Post.