The Consumer Financial Protection Bureau (CFPB) has a number of high-ranking employees and advisors who hail from mismanaged and/or failed institutions. These financial institutions include Fannie Mae and Freddie Mac, two of the main drivers behind the 2008 financial collapse.
Many of these failures occurred in positions with similar responsibilities as those currently held at the CFPB, including banking, financial regulatory agencies, and non-profits aimed at assisting the poor. The resumes of CFPB employees are troubling when considering how much power its bureaucracy has, and how little oversight exists.
Below is a list of senior employees and advisors and their experience prior to the CFPB:
Anthony Gibbs: Director, Midwest Region
Hired by CFPB Director Richard Cordray, Anthony Gibbs previously worked for HSBC for 19 years, last serving as the megabank’s Executive Vice President and Chief Operating Officer of Legal and Compliance. During his tenure in that position, the Department of Justice investigated HSBC for money laundering and providing U.S. dollars to terrorist-linked banks in both Saudi Arabia and Bangladesh.
Gibbs was mentioned by name on multiple occasions in a 335 page report by the Senate Subcommittee on Investigations. That same report found that HSBC was suspected of:
- Disregarding Terrorist Links
- Clearing Suspicious Bulk Travelers Cheques
- Longstanding Severe Anti-Money Laundering Deficiencies
- Allowing Anti-Money Laundering Problems to Fester
- Circumventing Office of Foreign Assets Control Prohibitions
- Offering Bearer Share Accounts
- Taking on High Risk Affiliates
HSBC ultimately settled with the DOJ for a record $1.25 billion in December 2012, shortly after Gibbs had left the bank.
CFPB advisory board member Gene Spencer worked at Fannie Mae for 28 years. While at Fannie Mae, he worked as the vice president of investor relations, and also served as the vice president for the mortgage-backed securities marketing.
Patricia McClung, the Assistant Director of Mortgage Markets for CFPB, worked for 23 years at Freddie Mac.
Suzanne Tosini serves as the Chief Administrative Officer of the CFPB. Tosini was previously the chief of operations for the TARP (bank bailout) program. Tosini has also held a director position at Freddie Mac.
Edwin Chow: Director, West Region
Before joining the CFPB in 2010, Mr. Chow served as the acting regional director and regional deputy director for the western region of the Treasury Department’s now-defunct Office of Thrift Supervision (OTS). OTS was effectively disbanded as part of the Dodd-Frank law that created the CFPB due to its incompetence during the financial crisis.
The most notable failure that occurred in Chow’s region during the financial crisis was that of IndyMac. According to an Inspector General’s report, “. . . [OTS’s] supervision of the thrift failed to prevent a material loss to the Deposit Insurance Fund. The [bank’s] high risk business strategy warranted more careful and much earlier attention.” (Emphasis added)
Bill Bynum: Consumer Advisory Board
Bill Bynum currently serves as the CEO of HOPE Enterprises, a non-profit 501(c)(3) in Mississippi whose stated mission is “to strengthen communities, build assets and improve lives of people in economically distressed areas of Arkansas, Louisiana, Mississippi, and Memphis, Tennessee.” From 2002-2011, HOPE reported net losses totaling nearly $13 million. Nonetheless, Mr. Bynum still received over $300,000 in annual compensation in an area with an average annual income of approximately $20,000.
Ellen Seidman: Consumer Advisory Board
Ms. Seidman was formerly the Executive Vice President of Shorebank Corp. At one time, Shorebank was the oldest and largest community development bank in the United States, with over $2.2 billion in assets and deposits totaling $1.5 billion, and was the official bank for the 2008 Obama campaign. Like many other high risk lending institutions, however, Shorebank failed in 2010 after the fallout from the financial crisis, ultimately costing the Federal Deposit Insurance Corp. (FDIC) $452 million.
Maeve Brown: Consumer Advisory Board
Like Ms. Seidman, Ms. Brown is also familiar with financial institution failures. Brown was the Chairwoman of People’s Community Partnership Federal Credit Union (PCPFCU), a community bank based in Oakland, CA. PCPFCU originally was started with only half the minimum capital ratio required by regulators to start a credit union. Over time, this led to financial stress, ultimately causing the bank’s failure in 2008.
Don Baylor: Consumer Advisory Board
Prior to joining the CFPB, Don Baylor was the legislative director for the New York Association of Community Organizations for Reform Now (NYACORN) and managed campaigns of $45 million between years 2001 and 2003. After ACORN was investigated by 14 states for voter fraud and the embezzlement of nearly $1 million by the group’s founder, Congress halted all federal funding, causing the scandal-ridden organization to file for Chapter 7 bankruptcy.