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1. If elected, Warren would undo the progress CFPB has made

   October 16, 2019 4:51 pm Leave a Comment

   This past week, twelve Democratic presidential candidates took the stage for their fourth debate—and, of course, Senator Elizabeth Warren didn’t miss the opportunity to bring up the Consumer Financial Protection Bureau.

   During the debate, Warren made sure to own responsibility for the idea of creating the agency that claims to protect people from big banks. Unfortunately, that is not what CFPB has done since its implementation. Instead, the agency, to date, has drummed up over $3.1 billion in regulatory costs; not including the hit that credit unions have taken or the money dished out in penalties.This agency that was supposedly put in place to protect consumers–as the name suggests–has done just the opposite. Instead, it has created unnecessary burdens for lenders and reducing credit access for potential borrowers.

   However, under the current director Kathy Kraninger, the agency has been more focused on the consumer and has ensured more free-market reforms. With Kraninger at the helm, the CFPB has cut spending and has changed its approach to reducing burdensome regulations. Since her first day on the job, Kraninger promised to work with financial organizations to protect consumers—instead of increasing regulations and credit costs, making them less available. She has stuck to her word.

   Thankfully, Kraninger understands that the bureau would operate better if the focus was on a free market approach, bettering both consumers and financial organizations. 

   But as Sen. Warren continues to be a favorite amongst the Democratic candidates thus far, the concern of what she would do if elected is daunting. It’s no doubt that if elected to the highest office, she would rollback the extensive progress that Kraninger has made by adding more burdening financial regulations. Only further hurting consumers instead of protecting them.

    

2. CFPB Director Calls the Bureau Unconstitutional

   September 25, 2019 7:11 pm Leave a Comment

   Barely a year into her term as the Director of the Consumer Financial Protection Bureau (CFPB), Kathy Kraninger is urging the Supreme Court to challenge the constitutionality of the CFPB. She has backed the Trump administration and the CFPB’s efforts to have the Court take up a lawsuit claiming the Bureau “violates the Constitution’s separation of power.”

   In fact, Kraninger told senior lawmakers that the Dodd-Frank Act — which established the CFPB — gives the Bureau too much independence and infringes on the president’s executive authority.

   One main concern is the Bureau’s restriction that only allows its director to be fired by the president “for cause” — typically understood as “severe incompetence or misconduct.” This requirement has been questioned multiple times as a violation of the Constitution’s separation of powers, as it would hinder the president’s decision-making power by “shielding the director.”

   Kraninger had previously defended the CFPB against court challenges questioning the Bureau’s constitutionality, but it seems she’s had a change of heart. This might not bode well for the future of the Bureau, which has already been ruled unconstitutional once (though that opinion was later overturned).

   Should the Supreme Court take up the issue, its decision could have potentially fatal implications for the CFPB, especially with the Bureau’s own director rooting against it.

3. CFPB Employees Still Lean Strongly Left

   August 14, 2019 7:33 pm Leave a Comment

   As primary season ramps up and presidential candidates flock to campaign events and debates, many Americans will generously open up their pocketbooks for the candidate they feel is best fit to run the country. While the recipient of an average joe’s campaign donation may not matter much, it can be cause for concern when the majority of donations made by employees of a certain government agency all end up in the same Democratic pockets. This campaign cycle (2019), that one agency would be the Consumer Financial Protection Bureau (CFPB).

   Using data pulled from the Federal Election Commission (FEC), all reported CFPB employee political donations from January 1, 2019 until August 14, 2019 (date data was pulled) went to three Democratic presidential candidates, one Democratic Congresswoman, and one left-leaning political action committee. Not one single donation from a CFPB employee went to a Republican, or even an Independent candidate or committee.

   It shouldn’t come as a shock that a majority (66.5 percent) of CFPB employee political donations went to the agency’s own architect Sen. Elizabeth Warren. Former Harvard Law Professor Warren proposed the creation of the CFPB in 2007 and it was formally instituted when Congress passed the Dodd-Frank Act in 2010.

   But despite boasting a newly appointed Director, it seems the agency cannot shake its left-leaning roots. While the Bureau has instated more free-market reforms, the CFPB’s main employees evidently still show a strong political bias towards one major party.

   While the agency was created as and continues to call itself non-partisan, its employees’ political giving suggests a less balanced reality. This could be a cause for concern for the public, who may have a different definition of “non-partisan” when it comes to their government agencies.

4. Interest Rate Caps Would Only Cause More Harm

   July 26, 2019 12:17 pm Leave a Comment

   Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez (AOC) have co-sponsored a bill that would cap consumer interest rates at 15 percent. The bill’s purpose is to ban payday loans and their lenders, which Sen. Sanders and AOC deem as “predatory.” But the attacks launched by these politicians are woefully misguided.

   Capping interest rates will only hurt those this bill intends to help–low income Americans. Payday loans allow consumers to access fast cash when most needed. Considering nearly 40 percent of Americans cannot cover an unexpected $400 expense, having access to legitimate short-term loan options is increasingly important.

   Because expenses often require more money than a customer has freely available, these credit unions must charge interest rates greater than 15 percent in order to keep making higher-risk, short-term investments like payday loans available.

   With a rate cap, payday loan businesses would be faced with an impossible choice: either reduce access to more riskier customers or go out of business immediately. The extinction of payday loan lenders would leave many lower-income neighborhoods without any kind of financial institution. The result is a loss of small businesses and consumer access to financial resources.

   Such a fate can be avoided if the government continues its role as a responsible steward of the payday loan market. With Kathy Kraninger, the recently appointed Director of the Consumer Financial Protection Bureau (CFPB), at the helm, we can be optimistic that it will.

   Upon taking office, Kraninger established goals for improving the agency’s consumer education, regulation, and enforcement policies. But, if rate caps are enacted–as Sen. Sanders and AOC would like–it will be more difficult for Kraninger’s goals to be realized.

   If Kraninger wants to increase access to credit and loans for all (which she did earlier this year by halting the restrictions on Payday lenders) she should step in and encourage Congress not to enact burdening interest cap rates.

5. What has 6 Months of New Leadership Meant for the CFPB?

   June 28, 2019 8:24 pm Leave a Comment

   This June marks Kathy Kraninger’s sixth month anniversary as the head of the Consumer Financial Protection Bureau (CFPB). Since assuming the director role, Kraninger has continued to implement free-market reforms, achieving true consumer protection through the supervision of financial institutions–a dramatic departure from the enforcement-by-rulemaking approach the agency was founded on.

   Kraninger’s Bureau outlined three guiding principles aimed at how to best run the agency: Educate consumers about financial products and money management; promote compliance and enforce the law; and modernize, clarify, and reduce the burden of rules. During her tenure, Kraninger has made successful strides at accomplishing many of these ambitious goals.

   Her most prominent action was the decision to rollback payday lending regulations. Had these regulations gone into full effect, thousands of Americans would have no longer been able to obtain quick and easy access to short-term credit. Considering nearly 60 percent of Americans cannot afford an unexpected $500 expense and one third are consistently stressed about finances, having short term credit options is vital.

   While Kraninger has only completed a mere six months of her five-year term, she has already proven her grasp of the CFPB’s true role. Hopefully, the next five and a half years will mirror her first few months and prove that regulator roll-back and consumer protection should continue to remain the agency’s main focus.

6. AOC and Bernie: Again Hurting Low-Income Americans through Their Policies

   May 9, 2019 9:39 pm Leave a Comment

   The notorious Socialists, Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders, teamed up this week to introduce a new policy further harming low-income Americans: the Loan Shark Prevention Act.

   This deceptively named legislation would officially cap all interest rates on consumer loans at 15 percent, effectively reducing access to credit for low-income Americans by making it too costly for credit lenders to risk lending them credit. This could then lead potential borrowers who were denied access to credit to turn to less reputable and more expensive forms of obtaining credit, including dangerous illegal loan sharks.

   Short-term payday lending allows borrowers to obtain a quick and easy loan between paychecks in order to cover necessary expenses. While critics like to point to the high annual interest, in practice the loans typically cost $15 for every $100 borrowed. Regulations are strict about the transparency of fees and interest. Considering that nearly 60 percent of Americans do not have enough cash to cover an unexpected $500 expense, these short-term loans offer a much-needed option to thousands of potential borrowers.

   Credit unions and banks do offer some short term loan products at lower rates, but they can be complicated and usually requires the opening of a bank account. The ease and simplicity of payday loans have made them popular in low-income communities.

   AOC and Bernie, who continually claim to be representing the common people, are only further hurting Americans chances to obtain credit by their policies. This ill-informed policy is a classic example of legislation that will only harm those it is intended to help.

    

7. Welcoming a Kinder CFPB

   April 30, 2019 5:20 pm Leave a Comment

   In a recent speech, newly confirmed Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger laid out her plan to reshape the agency to focus more on working with financial institutions to protect consumers.

   Since its creation, the Bureau’s mission has been to protect consumers against bad financial actors. However, over the years, the agency has become more of an overzealous traffic cop than anything else–aggressively fining financial firms that violate their regulations rather than working with them to remedy the situation.

   Under the leadership of Kraninger, the emphasis will not be on how many fines the agency can collect, but on “preventing consumer harm by maximizing informed consumer choice.”

   Kraninger also directed her agency staff to adopt a more collaborative approach, such as initiating more private interactions with financial institutions.

   Kraninger’s market-friendly leadership will be good for both consumers and financial institutions. Reducing outdated and unnecessary regulations on financial firms will allow for easier access to obtain credit for consumers who need it most. Rather than slapping companies on the wrist every time they violate the CFPB’s often convoluted regulations, Kraninger’s new approach will hopefully allow financial regulators to work with institutions to develop better ways to protect consumers.

   A win-win for everyone.

8. Eliminating Payday Regulations is Good for Consumers and Businesses

   March 29, 2019 2:59 pm Leave a Comment

   Last month, the Consumer Financial Protection Bureau (CFPB) proposed a plan to eliminate the Payday lending regulations created by the Obama Administration in 2017. Consumers and small businesses alike should rejoice in the opportunity for more flexible access to credit, and for an end to these potentially harmful regulations before they have a chance to go into full effect later this year.

   Payday loan regulations were created under the false pretense that without stringent limitations, consumers who lack a “requisite level of understanding” would over-borrow, resulting in a massive “debt trap.” But, this could not be further from the truth. Access to short-term loans is good for both consumers and businesses. Recent surveys show that one-third of Americans are stressed about finances and 60 percent do not have enough cash on hand to cover an unexpected $500 expense. Additionally, small businesses who often need access to quick credit to cover payroll for a month benefit from the ability to take out Payday loans.

   Obtaining a payday loan is and should be remarkably simple. A borrower needs to be able to prove they have an income, a checking account, and an ID and then they can obtain a short-term loan for a small fee of nearly $15 for every $100 borrowed. The CFPB’s proposed Payday regulations would have forced lenders to verify a borrower’s income, any major financial obligations, and borrowing history before issuing a loan. Had these regulations gone into full effect, it would have almost certainly crippled the entire loan industry by making the costs of issuing a loan too high for Payday lenders.

   Ensuring access to short-term credit benefits consumers and businesses. Any unnecessary restrictions and costly fees would only force borrowers to look to less-desirable, higher-cost options.

9. Former AFR Spokesperson Arrested for Multiple Violent Felonies

   February 4, 2019 9:23 pm Leave a Comment

   Last week, former Americans for Financial Reform (AFR) employee, Joseph “Jose” Alcoff, was arrested and charged for multiple felonies including aggravated assault, ethnic intimidation, and terroristic threats.

   AFR is a progressive non-profit which has been a huge advocate in the creation of the Consumer Financial Protection Bureau (CFPB).

   Alcoff previously served as AFR’s spokesperson and has been featured in press releases for Sen. Diane Feinstein and Sen. Tammy Baldwin advocating for stricter financial reform regulations. Last year, Alcoff even appeared with Congressman Beyer in front of CFPB headquarters calling for the end of Payday Lending.

   Alcoff’s felonies stem from his participation as an organizer with the controversial Smash Racism DC, an Antifa group.

   Upon realization of Alcoff’s ties to Smash Racism, AFR attempted to hide all evidence of Alcoff’s work with the organization by altering the way his name was seen on their website and have since only provided the statement that he is “no longer works for AFR.”

   Politicians who have continued to use resources provided by AFR to advocate for additional financial regulations should ease caution in dealing with a shady organization whose employees have ties to Antifa organizations and violent behavior.

10. Warren 2020?

    January 11, 2019 5:51 pm Leave a Comment

    This month, the CFPB’s chief architect Senator Elizabeth Warren officially announced the formation of her presidential exploratory committee. But Warren’s brainchild and main 2020 campaign talking point might be doing her more harm than good.

    While still serving as a Harvard University professor, Warren spearheaded the Bureau’s creation through Congress’s Dodd-Frank Wall Street Reform and Consumer Protection Act. She believed that having a “watchdog” agency keep a close eye on wall street and other financial institutions would be a surefire way to protect consumers. Sadly, for Warren, the CFPB has been anything but a success.

    Since its inception in 2010, the Bureau has issued more than $5 billion in penalties, punishing employers under the pretense of “protecting consumers.” In one year alone, credit unions took a $7 billion regulatory hit after accounting for revenue lost. For consumers, these additional and abusive regulations make it more difficult to receive much-needed loans for simple things such as covering rent or paying a utility bill.

    Additionally, the Bureau has been deemed unconstitutional on more than on occasion. In a district court case, newly confirmed Supreme Court Justice Brett Kavanaugh had stated that, aside from the President, the Bureau was a “more unilateral authority than any other officer in any of the three branches of the U.S. Government.” He argued that the Bureau’s “combination of power” was “massive in scope” and triggered the question on constitutionality.

    Unphased by this and other criticisms, Senator Warren continues to position herself as a proponent of the CFPB and a leading critic of the financial sector. But her role in shaping one of the most controversial and scandal-ridden agencies may come back to haunt her during her presidential campaign. Perhaps she would be better off discussing her DNA heritage.