The Consumer Financial Protection Bureau (CFPB) is not a regulatory agency widely known to the public, but it is quickly becoming a topic for presidential candidates and high-ranking politicians.
During the Republican presidential debate in Milwaukee, a 30-second attack ad against the CFPB was aired by the “action tank” American Action Network (AAN), as part of the right-leaning group’s $500,000 campaign against the bureau. Additionally, Republican candidate Carly Fiorina took aim at the Dodd-Frank Act as “the classic of crony capitalism.”
It would appear that the CFPB and its enabling statute, the Dodd-Frank Act, might become a bigger issue than expected in the upcoming debates and election.
The ad, which was condemned by Sen. Elizabeth Warren (D-Mass.) as a “bold and shameless” affront, not only attacked the bureau itself, which is the brain child of Warren, but Warren herself. In the ad, Warren is depicted as a communist dictator in charge of a Soviet-esque bureaucracy.
“They call it CFPB, Washington’s latest regulatory agency, designed to interfere with your personal financial decisions — that car loan you needed, your mortgage, that personal loan,” the advertisement’s narrator intones. “With the Consumer Financial Protection Bureau, those who need help the most are denied.”
The in-your-face symbolism was certainly not lost on Warren.
“So ... Can we talk about that ad that just ran during the GOP debate where I look like a Commie dictator?” She tweeted during the debate.
Warren also emphasized that the CFPB has returned more than $11 billion to consumers “cheated on credit cards, mortgages, etc.”
Although Warren brushed off the personal attack, saying that she was able to handle it, “working families who need the CFPB can’t – not when they’ve been crushed, squeezed and hammered by the big banks and their friends in Washington for years.”
“It's up to us to fight back,” Warren said in an email urging supporters to raise $30,000 – the same amount she contended AAN spent to run the ad.
“The CFPB will keep on doing its job, but we’re here to make sure that it can keep doing its job,” she said. “We fought to build the CFPB because we believe that no one should get cheated on a mortgage, credit card, car loan or any other credit product – and we’re ready to say loud and clear that we will keep on fighting to protect this agency.”
Democratic presidential candidate Hillary Clinton also was appalled by the attack ad.
“The CFPB protects borrowers from unfair and deceptive Wall Street practices. Attacks against it are unfounded and outrageous,” she tweeted.
The CFPB also came up during the debate when candidate Fiorina criticized the Dodd-Frank Act, stating: “The big have gotten bigger, 1,590 community banks have gone out of business, and on top of all that, we’ve created something called the Consumer Financial Protection Bureau, a vast bureaucracy with no congressional oversight that’s digging through hundreds of millions of your credit records to detect fraud. This is how socialism starts, ladies and gentlemen. We must take our government back.”
This is certainly not the first time the CFPB has been criticized for its independence.
Brenden D. Soucy, a Miami-based lawyer, wrote an article critical of the bureau’s degree of congressional oversight in the Florida State University Law Review in 2013. He called the bureau “the most independent agency in United States history.”
“The CFPB’s extreme independence is touted as one of its greatest virtues, but history has shown that while independence from political pressure can be a virtue, near total isolation is not,” Soucy wrote.
Nonetheless, Soucy said that Fiorina’s statement was not completely accurate.
“While the CFPB is nearly completely free of congressional oversight, it is not true to say that it has ‘no’ congressional oversight,” he said.
Fiorina wasn’t the only one to criticize Dodd-Frank and the CFPB, however. Sen. Mark Rubio, also a Republican presidential candidate, also took aim at the banking reform law.
“In Dodd-Frank, you have actually codified too-big-to-fail,” Rubio said. “This is an outrage. We need to repeal Dodd-Frank as soon as possible.”
As the presidential debates start heating up, we’ll look forward to hearing more from candidates on their opinions and solutions for banking reform.