July 21, 2011
Today, the Consumer Financial Protection Bureau (CFPB) officially opened its doors in Washington, making it the first major new federal agency in nearly 10 years. Americans should take notice, and they ought to be concerned. Heritage’s Diane Katz explains in The Daily Caller that the sheer scope of the agency’s power–and its lack of accountability–poses concerns for every American:
This is a regulatory agency with unparalleled powers, including consolidated and expanded regulatory authority over credit and debit cards, mortgages, student loans, savings and checking accounts, and most every other consumer financial product and service. Essentially, all consumers’ money falls under bureau purview unless it’s under a mattress.
The good news is that, at least for the time being, the Agency cannot exercise the full extent of its powers because it does not yet have a director. But Katz says the CFPB is not entirely impotent, and Congress should act to rein-in its authority:
With a battalion of bureaucrats at the ready, and a budget of $500 million, the CFPB is busily gathering intelligence on most every type of financial firm and preparing regulatory sorties under existing laws.
Other flaws surrounding the CFPB abound, including weak oversight by the Financial Stability Oversight Council as well as new burdens the CFPB will impose on financial institutions and their customers–thereby increasing risks to the financial system.