Any time we get close to a big election, financial issues are always a top priority for candidates and voters. A banking regulation issue that both Republicans and Democrats have a lot of concern about is that of the Consumer Financial Protection Bureau (CFPB.) As might be expected, neither side sees eye-to-eye on this topic.
Generally speaking, Republicans are in favor of less regulations on the banking industry. As such, this party believes that the CFPB is a rogue government agency. They have said that its work has done nothing but make trial lawyers rich while clogging up the system with troublesome investigations. Democrats, for their part, have stood behind the creation of the agency and have supported additional regulations on the banking industry. They say that the agency is dedicated to protecting the interests of American consumers.
As important as the issue is, it will likely become even more important over the next few months. As we get closer to the next elections, both parties will likely work hard to sway voters to take their side in the battle over which banking regulation approach is best for the United States. This battle is a lingering effect of the financial meltdown of 2008. Industry experts believe that the crisis never would have happened if the right kinds of checks and balances were in place back then, and that new legislation – including the creation of the CFPB – were intended to help prevent a similar financial crisis from happening in the future.
Financial analysts state that the Republican perspective on the CFPB fits in with the position that the U.S. Chamber of Commerce and bigger banks have taken. The U.S. Chamber of Commerce looked at 251 CFPB-studied cases. It turns out that lawyers averaged about $1.35 million per case on these sample cases. Banks have also gone on record about being concerned with complaints that are difficult to justify. A statement from Frank Keating of the American Bankers Association said, “While the banking industry is committed to helping consumers make informed and responsible financial decisions, public disclosure of unverified consumer complaint narratives doesn’t advance that goal and raises significant consumer privacy issues.”
Supporters of the CFPB, however, see things a bit differently. They believe that the things the CFPB has been doing have been important aspects of the overall banking regulatory foundation. At the DNC, Elizabeth Warren said, “Five years later, that consumer agency has returned $11 billion to families who were cheated. And Republicans? Republicans, they’re still trying to kill it.” Warren, of course, has a vested interest in the success of the CFPB. After all, she was one of the chief architects of this agency, and has been one of the CFPB’s most vocal supporters over the years.
Recently, the CFPB took action against one of the country’s leading banks. This action came after the bank allegedly did not comply with Dodd-Frank Wall Street Reform and Consumer Protection Act regulations. The CFPB said that the bank charged illegal fees on educational loans and that it did not give payment information to borrowers that they are legally required to provide.
We won’t see either side back down when it comes to the ideological battle over the CFPB. Voters need to learn as much as they can about the Bureau and the various issues it has been involved with over the years. They then need to support what they believe to be right by casting votes to support any measures that are directly related to the future of the CFPB. It may prove to be a battle that goes on for some time, but voters need to understand the issue and then vote accordingly to effect positive change.