the Consumer Financial Protection Bureau

[phkrause]

What does having the Consumer Financial Protection Bureau on hold mean for consumers?

NEW YORK (AP) — The Consumer Financial Protection Bureau, which Congress established to monitor credit card companies, mortgage providers, debt collectors and other segments of the consumer finance industry, is the latest U.S. government agency to have its work halted by the Trump administration.

https://apnews.com/article/cfpb-trump-vought-consumer-protection-52e00309b2f1b55d4de6eadd0057bd50?

[bonnie1962]

Barack Obama and Elizabeth Warren ©KEVIN DIETSCH/UPI/Newscom© Reason

Since at least the days of the ancient Greeks, humans have known that one way to write a compelling story is by including a bit of hamartia—a tragic flaw.

Sometimes that is a physical shortcoming—Achilles had that famously vulnerable heel—but it is often more interesting if the flaw is a more innate thing tied to a character's understanding of themselves. Hubris, or excessive pride, is the famous one. After all, it wasn't really Achilles' unprotected heel that took him down, but his false belief that his mother had made him invulnerable.

 

You might say the exact same thing about the Consumer Financial Protection Bureau (CFPB). It could be headed into a sort of coma later this year because of a fatal flaw embedded by its own parents: Sen. Elizabeth Warren (D–Mass.) and former President Barack Obama.

Unlike every other department and agency within the federal government, the CFPB is not funded via congressional appropriations. Instead, its funding flows directly from the Federal Reserve. Each year, the White House submits a budget to the Federal Reserve, and the central bank hands over the necessary amount—$729.4 million last year, in case you were wondering.

For a long time after the CFPB was created in 2010, there were serious questions about the constitutionality of that structure. That finally got resolved last year, when the Supreme Court ruled that Congress was within its powers to hand off the purse strings. So, funding the CFPB via the Federal Reserve is not unconstitutional—it's just unorthodox and foolish.

 

Here's where the hubris enters the story. When Warren and Obama created the CFPB, they designed that unorthodox funding structure specifically to prevent a future Republican-led Congress from trying to defund the bureau. Remember, this was in the age when Republicans were running around the country telling voters they intended to repeal Obamacare too. By isolating the CFPB from Congress' budgetary powers, Warren was trying to make it invulnerable to attack.

Instead, she simply gave it a fatal flaw.

Earlier this week, the Trump administration submitted its CFPB funding request to the Federal Reserve. It asked for…$0.

"Pursuant to the Consumer Financial Protection Act, I have notified the Federal Reserve that CFPB will not be taking its next draw of unappropriated funding because it is not 'reasonably necessary' to carry out its duties," wrote Russ Vought, director of the White House's Office of Management and Budget (OMB), wrote on X on Saturday night. "The Bureau's current balance of $711.6 million is in fact excessive in the current fiscal environment. This spigot, long contributing to CFPB's unaccountability, is now being turned off."

 

That appears to be the end of the CFPB, at least until a Democrat returns to the White House. Trump will need an act of Congress if he seriously wants to abolish the Department of Education, for example, and even minor spending cuts being made across the executive branch will eventually need congressional or legal consent to be permanent. But there should be no serious questions about whether the president can unilaterally defund the CFBP. Congress has no role to play in that fight.

Like Thetis dipping her infant son in the river Styx to grant him near-invulnerability—except for the heel she was holding—Warren thought she was making the CFPB an unstoppable force. Instead, she left its fate in the hands of President Donald Trump, rather than Congress.

The analogy breaks down somewhat because the CFPB is no epic hero. It has "reduced access to credit cards for lower-income consumers and jacked up bank fees and mortgage costs," as Reason contributor Veronique de Rugy summarized last year. "CFPB bureaucrats also love price controls and excessive regulations, and they despise financial arrangements that they view as unconventional."

 

In its absence, governmental functions that protect consumers from financial crimes will continue at the Department of Justice (which prosecutes fraud), the U.S. Treasury (which regulates financial institutions), the Federal Deposit Insurance Corporation (which underwrites bank accounts), and various other state and federal entities. The CFPB's demise, which is probably only temporary anyway, is hardly worth worrying about and certainly not worth mourning.

Unless, of course, you are its mother. Warren joined CFPB staff (who had been told to work from home indefinitely) in a protest at the agency this week. "This is like a bank robber trying to fire the cops and turn off the alarms just before he strolls into the lobby," she said while there. "Congress built it, and no one other than Congress—not Donald Trump, not Elon Musk, no one can fire the financial cops."

 

If she could do it all over again, perhaps she'd take a different course.

There's a lesson here for Republicans too. Power is fleeting and the political dynamics are always shifting. The CFPB was born in an era when Democrats falsely believed their electoral majority (in presidential elections, at least) would only become more dominant in the years after Obama. They were very wrong about that. Republicans are now in a moment where they believe something similar, despite a minuscule congressional majority and a president who got votes from less than 24 percent of Americans.

And, as always, hubris comes before the fall.

The post Elizabeth Warren's Hubris Allowed Trump To Defund the CFPB appeared first on Reason.com.

[phkrause]

? So long, credit card reform. Surrendering to bank lobbyists, the Consumer Financial Protection Bureau announced it will stop enforcing the new $8 junk fee cap for major credit cards. Several major credit card providers stopped charging these predatory late fees, which overwhelmingly hurt the poorest borrowers, after the CFPB published 2016 data showing banks were averaging between $11 and $12 billion in profit annually just from overdraft and insufficient fund fees. With the rule now defunct, at least we know shaming works — banks reduced their junk fee profiteering by more than 50 percent, to approximately $5 billion a year by 2023, even before the CFPB’s rule was announced.

[phkrause]

CFPB

The Trump administration is gutting the Consumer Financial Protection Bureau — despite a court order not to do so. The independent agency, created after the 2008 financial meltdown, protects Americans from financial abuses and has regulatory authority over many types of products and services, including bank accounts, consumer debt collection, credit cards, credit reporting and loan servicing. But on Thursday, the Trump administration laid off about 1,500 out of 1,700 employees, the National Treasury Employees Union said. Last week, a federal appeals court told the administration that it can shrink the agency but not dismantle it, nor can it trim the CFPB so much that the staff can’t carry out its statutory functions. Federal employee unions and other organizations have asked a judge to hold an emergency hearing on the layoffs, claiming the administration violated the previous court order by “cutting the Bureau’s staff by 90 percent in just 24 hours.”

[phkrause]

Consumer watchdog ends investigation into buy now, pay later company linked to Donald Trump Jr.

WASHINGTON (AP) — The Consumer Financial Protection Bureau has dropped an investigation into a buy now, pay later company with close ties to President Donald Trump’s son Donald Trump Jr., saying the investigation was conducted in a biased manner and based off politics.

https://apnews.com/article/cfpb-trump-jr-credova-investigation-dropped-3c1e6bdcd5ebed03de857908a0037e5d?

ps:Of course they did!!!!!