Category Archive: Secrecy

  1. New Documents Reveal More Bias Towards Hated Obama Era Industry

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    The Obama administration was never shy about its targeting of industries it was not a fan of.

    Case and point, the creation of the Consumer Financial Protection Bureau (CFPB), an organization which has primarily targeted financial intuitions the Obama administration wasn’t fond of. Throughout the CFPB’s existence industries such as banks, credit unions, and small dollar loan lenders have all been scrutinized and unfairly targeted by the Obama administration.

    But recently released documents bring the targeting to a whole new level. Through a sneaky Department of Justice initiative called Operation Choke Point, other political foes of the Obama administration soon saw attacks that were beginning to cripple their existence.

    Operation Choke Point essentially gave the Federal Deposit Insurance Commission (FDIC) autonomy to unfairly target industries it arbitrarily deemed to be “high risk.” These industries included firearms, fireworks, porn, small-dollar lenders, and tobacco product merchants. Again, all foes of the administration.

    These newly released documents show just how far senior officials at the FDIC would go to ensure banks would not conduct business with these legal businesses. One FDIC director instructed his staff to use “available means, including verbal recommendations, to strongly encourage [supervised banks] to refrain from any activities that provide assistance to the business activities of [payday] lenders.”

    Obviously, under this pressure and fear of retaliation, banks abruptly ended their relationships with these targeted industries. Many firearm manufactures and payday lenders were soon confused to why, without much explanation, they no longer had access to credit lines and bank accounts.

    These new documents coupled with the CFPB’s unfair restrictions put on many other industries show just how far government entities can go to choke off certain industries it arbitrarily deems as political enemies. The government has done it before and it can certainly do it again.

    Congress should be wary to continue to give agencies such as the CFPB (which barely has any congressional or executive oversight) too much power before it starts unjustly targeting industries based on personal bias and not sound facts.

  2. Mulvaney Criticism Ignores Cordray CFPB’s Cozy Activist Relationships

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    The AP recently claimed the Consumer Financial Protection Bureau (CFPB)—now under the leadership of White House Budget Director Mick Mulvaney—boasts a “cozier relationship between industry and regulator.”

    But what about Richard Cordray’s CFPB? For years, the agency maintained a cozy relationship with activist groups hell-bent on punishing payday lenders and other industries.

    One example is the Center for Responsible Lending (CRL), which routinely secured closed-door meetings with Cordray’s team. The group even provided an initial draft of a proposed small-dollar lending rule to the CFPB. According to a Politico report:

    The Center for Responsible Lending spent hours consulting with senior Obama administration officials, giving input on how to implement the rule that would restrict the vast majority of short-term loans with interest rates often higher than 400 percent. The group regularly sent over policy papers, traded emails and met multiple times with top officials responsible for drafting the rule.

    The National Consumer Law Center—another liberal advocacy group—“worked with the agency to help craft the [payday] proposal.” That’s right: Under Cordray, special interest groups effectively formalized government mandates worth tens of millions of dollars.

  3. Richard Cordray Uses Government Email for Politics?

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    In late July, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray’s plan to run for Ohio governor leaked. Within days, Cordray received a message with an offer to help with his potential 2018 campaign, which he then forwarded to a redacted email address.

    According to the Washington Free Beacon, “an individual calling herself Debbie” wrote to Cordray’s government email account after learning about his plan to run in Ohio. Cordray then forwarded the message to another account. Kendra Arnold, executive director of the Foundation for Accountability and Civic Trust, claims the email exchange raises questions over Cordray’s handling of a government email address and the Hatch Act, which prohibits federal employees from using government resources for political activities. According to Arnold, “Simply receiving a partisan email and forwarding it to your own personal account is not a violation of the Act. In this case though, we do not know who Cordray forwarded the email to because of the redaction.” She continues: “The fact that the email was about Cordray running for office makes it incumbent on Cordray to explain.”

    We’re waiting for an explanation, knowing that Cordray has long overseen a politically biased CFPB. According to Federal Election Commission data, 100 percent of campaign contributions made by the agency’s employees went to Democratic candidates. Even the Obama administration’s Justice Department was more diverse in its workforce’s political preferences.

  4. Opinion Pages Bombard CFPB with Scathing Critiques

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    First, there was Sen. Ben Sasse’s (R-NE) February op-ed column in USA Today: “Nobody in his right mind thinks the lesson of 2016 was ‘give more power to the elites.’ In a country of 320 million Americans, we don’t have room for any kings… It’s time to fire Richard Cordray.” It didn’t take long for Rep. Jeb Hensarling (R-TX) to echo these concerns, calling Cordray’s agency “destructive and dangerous.”

    Pressure’s only mounting on the Consumer Financial Protection Bureau (CFPB), an unaccountable federal agency led by an even less transparent director. In recent weeks, several members of Congress have penned op-ed pieces criticizing the CFPB for its general lack of accountability. In The Charlotte Observer, Rep. Robert Pittenger (R-NC) argued that the “CFPB’s breathtaking lack of accountability and proclivity for excessive regulations have harmed consumers and made it difficult for businesses to create jobs.” In his words: “Due to the lack of oversight, [the] CFPB has been free to create excessive regulations, which restrict job growth, restrict access to credit options, and increase the cost of credit.”

    In The Detroit News, Rep. Bill Huizenga (R-MI) criticized the “one-size fits all regulatory structure,” while ran a Rep. David Kustoff (R-TN) piece claiming that “unelected bureaucrats and overregulation [have] handcuffed community banks, regional banks, credit unions, and other lenders.”

    That’s called losing in the court of public opinion.

  5. Richard Cordray Pulls a Hillary Clinton

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    Poor Richard. In January, a Freedom of Information Act (FOIA) request revealed that Director Richard Cordray, head of the Consumer Financial Protection Bureau (CFPB), used a private device for government communications with CFPB employees. And he failed to report these messages to the agency—a clear violation of government policy.

    An even more recent FOIA investigation unearthed private communications between Cordray and Eileen Mancera, a longtime Clinton donor and Democratic lobbyist. An analysis of Cordray’s text messages shows the CFPB head communicating with then-CFPB staffer Rohit Chopra—a former senior fellow at the left-wing Center for American Progress—to set up a conversation with Mancera. She happens to have “extensive experience as a political fundraiser,” having raised more than $1 billion for Democratic candidates, including more than $100,000 for Hillary Clinton in 2016. Cordray apparently used a private device (a la Hillary Clinton) to hide his messages with a Democratic power player.

    Yet Cordray describes the CFPB as “an independent agency,” one “kept separate from partisan politics or big-money special interests.” Come on, Mr. Cordray.

  6. Former CFPB Attorney Blasts the Agency

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    In a recent National Review op-ed column, Ronald Rubin, a former enforcement attorney at the Consumer Financial Protection Bureau (CFPB), chronicled the CFPB’s formation and regulatory agenda. He also took us behind the scenes of the agency’s appalling hiring process:

    As screening techniques improved, Republicans were more easily identified and rejected. Political discrimination was not necessarily illegal, but attempts to hide it invited prohibited race, gender, religion, and age discrimination. In retrospect, the Office of Enforcement’s hiring process, which was typical for the bureau, violated more laws than a bar-exam hypothetical.

    The CFPB seems to have been successful in keeping Republicans out of the agency—research shows that every political donation made by a CFPB employee in 2016 was given to a Democratic candidate.

    Speaking of racial discrimination:

    Applicants who had represented financial-industry clients were routinely rejected, depriving the bureau of critical expertise and business perspective. A memorable exception sought to become only the second African-American female enforcement attorney. Following an hour-long debate that would have doomed most applicants, her verdict was postponed pending additional interviews. Her prospects looked good at a subsequent meeting until someone expressed concerns over her frequent use of the F word. She survived a second excruciating hour of debate, and worked for the CFPB just long enough to become a partner at a big law firm.


    White men over 40 received the opposite treatment. One attorney’s résumé was so spectacular that interviewers struggled to come up with plausible excuses to reject him. Finally, someone blurted out, “For the love of God, don’t hire him!” Cordray, who always spoke last, had no choice. He asked that the rejection letter be delayed until he could call the Supreme Court justice who had left a voicemail recommending the man.

    And then there’s the reign of Kent Marcus as the CFPB’s enforcement director from 2012 to 2015. (He’s now a counselor in Director Richard Cordray’s office.) See here:

    Markus, the new enforcement chief, exacerbated hiring biases by soliciting anonymous oral comments about colleagues competing for twelve mid-level supervisor positions. Similar illegal practices throughout the bureau resulted in a dearth of real-world experience, and then socialistic management schemes camouflaged by new-age nomenclature.

    Bias. Illegality. Socialism. CFPB.

  7. CFPB Comes After Free Speech Next

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    It’s been a rough month for the Consumer Financial Protection Bureau (CFPB). In early October, the U.S. Court of Appeals for the District of Columbia Circuit described the CFPB as “unconstitutionally structured” and a “gross departure from settled historical practice.” The appellate court even curbed Director Richard Cordray’s nearly limitless power, making him removable by the president at any time and for any reason.

    Now the rogue agency has come under attack from legal experts across the political spectrum. What now? For issuing a proposal to force those under CFPB investigation to keep quiet about the probe. In effect, the CFPB wants to prohibit individuals and companies from disclosing confidential investigative information, keeping investors, shareholders, and the American public in the dark about federal investigations—threatening free speech and the public’s right to information.

    Opposing the mandate, William Johnston—chairman of the American Bar Association’s Business Law Section—argues, “Our legal system…presumes that ordinary citizens are free to discuss government activities and presumes that government efforts to restrain such speech are unconstitutional.” He adds that the CFPB’s proposal presents “severe First Amendment problems.” Johnston is joined by Arthur B. Spitzer, legal director at the American Civil Liberties Union, who also points to “serious First Amendment problems” and likens the CFPB plan to a series of “gag orders.” Rep. Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, fears that it will ultimately lead to “unwarranted fishing expeditions.”

    Unfortunately, government fishing trips have become far too common in Dodd-Frank America.

  8. Top CFPB Official Tried to Hide Emails with Banks

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    Like other federal agencies, the CFPB has to comply with the Freedom of Information Act (FOIA) by turning over documents and emails when requested by a member of the public. But at least one senor CFPB executive sought to prevent the public release of certain agency communications.

    A report from the Washington Examiner found that the CFPB’s assistant director of the Office of Consumer Response, Scott Pluta, consulted his co-worker for ways to shield communications with banks from FOIA requests. He even told the agency’s FOIA officers and legal council that “you’re absolutely killing me…I would really appreciate if in the back of your heads you could think about how to creatively solve this puzzle.”

    Pluta is no stranger to controversy. Pluta sent an August 2013 email to CFPB whistleblower Angela Martin ordering her to cease communication with her CFPB co-workers, which led the National Treasury Employees Union (the CFPB employees’ union) to file a grievance against Pluta. Pluta also happens to be the CFPB official Martin said demoted her and gave her harsh performance reviews after she complained of workplace discrimination.

    The CFPB insists “transparency is the core of our agenda,” but consistently skirts attempts to shine a light on its activities.