CFPB’s Previous Life of Progressive Activism and Profits
“Revolving door” profiteers and activist progressive think tanks are well-represented throughout the Consumer Financial Protection Bureau (CFPB), giving the organization the appearance of a playground for profiteers and activists.
The CFPB is supposedly a politically neutral agency; however, it exhibits considerable bias in its hiring practices. Current and former CFPB officials have ties to leftwing advocacy groups, as well as President Obama. The backgrounds of many of its employees make it apparent that this organization has stacked the deck in order to support the director’s aggressive regulatory agenda.
“The Advocacy Groups”
Progressive “think tanks” are well represented in the CFPB and will push their agenda toward unchecked regulatory action. The Center for American Progress (CAP), Association of Community Organizations for Reform Now (ACORN), Fannie Mae, Freddie Mac, and the Center for Responsible Lending (CRL) among other groups have alumni spread throughout the bureau with the similar high-risk lending regulatory agendas that started the financial crisis in the first place.
CAP is a self-described “think tank on steroids” founded by John Podesta, former White House Chief of Staff under President Bill Clinton. According to a 2008 article in Time Magazine, “not since the Heritage Foundation helped guide Ronald Reagan’s transition in 1981 has a single outside group held so much sway… President-elect Obama has effectively contracted out the management of his own government’s formation to Podesta.”
The Center for Responsible Lending is an organization that lobbies in favor of rules and laws that benefit its affiliate, the Self-Help Credit Union. CRL has expressed great interest in the CFPB’s policies largely due to their intentions to regulate the non-depository or “payday lending” bankers. Credit unions stand to lose the most from unregulated banking as their overdraft fees can reach amounts of 2,000% APR compared to the 400% APR associated with payday loans. For example, Self-Help’s returns have more than doubled since payday lenders were banned in North Carolina. Now that the CRL has spread to other states, Self-Help looks to regulate unconventional lenders across the country.
The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, more commonly known as Fannie Mae and Freddie Mac, were merged under the Federal Housing Finance Agency following their bankruptcy during the 2007 financial crisis. Fannie Mae and Freddie Mac were known for their irresponsible lending and risky financial practices that led to the financial crisis. Now, a number of their former employees have moved to the CFPB to further their regulatory agenda. Even though the CFPB was created to monitor risky lending through the “credit police,” a number of CFPB personnel have expressed interest in easing lending requirements to underserved communities, a practice eerily similar to that of Fannie and Freddie.
Naturally, the quasi-governmental Fannie Mae and Freddie Mac and outside groups, most notably the Center for American Progress, took an interest in the formation of the Consumer Financial Protection Bureau, and so did a number of their employees.
- Camille Busette, former CFPB Assistant Director of the Office of Financial Education, previously worked for the Center for America Progress as a Senior Fellow for Economic Policy. Ten other members of the CFPB’s research staff have reportedly worked for CAP.
- Janneke Ratcliffe, the CFPB Assistant Director of Financial Education, was previously a senior research fellow at the Center for America Progress. Ratcliffe worked at this leftwing advocacy group (funded by George Soros) for nearly 5 years.
- Christopher D’Angelo holds the prestigious title of Chief of Staff to the CFPB. D’Angelo was previously a regional field director for “Obama for America.”
- Roberto Gonzalez, the former Deputy General Counsel for the CFPB, previously served as an Associate Counsel in the Obama White House.
- Over 30 employees have worked at or been involved with Fannie Mae and Freddie Mac, making the CFPB a recycling box for failed and closing government offices.
- At least 20 employees reported working for Housing and Urban Development, a government office focusing on public housing and riddled with wasteful scandals.
- Jose Quinonez, former Chairman of the CFPB Consumer Advisory Board, was a policy Director for EARN.org as well as California Outreach Director for the Center for Responsible Lending. Quinonez previously worked for Democrat Congressman Ruben Hinojosa, and he also worked for the liberal group MoveOn.org. While at MoveOn, Quinonez worked to defeat George Bush in Florida. Quinonez founded the group BlueLatinos.org, a now defunct liberal organization. According to Quinonez, the purpose of the group was to “reach out to U.S. Latinos as part of a plan to illustrate how progressive values are consistent with both Latino and traditional American values.” Quinonez is the Chairman of the San Francisco-based Mission Asset fund, which ran deficits in excess of $300,000 in 2009 and 2010.
- Leslie Parrish, another alumnus of the Center for Responsible Lending, acted as the Program Manager for Payday and Small Dollar Loans at the CFPB, working to regulate borrowing choices for low-income earners. After a two-year stint at the CFPB, Parrish left the agency to return to the Center for Responsible Lending.
- Don Baylor, a member of the Consumer Advisory Board, is currently a senior fellow at the Center for Public Policy Priorities. He was formerly the legislative director for New York ACORN, a progressive community organizing association defunded by Congress for allegations of fraud and embezzlement.
- More than 25 reported members of President Obama’s 2008 and 2012 campaigns currently work for the CFPB. No CFPB employees have reported to work for any Republican candidates.
Attorneys and law school graduates applied for jobs at the CFPB amid skepticism that they were pursuing insight into the tide of regulations that will govern a significant portion of the U.S. economy. After only two years in operation, some CFPB attorneys have already left for various private firms. Some firms are able to boast more CFPB alumni than others. For example, Wilmer Hale, a prestigious D.C. law firm with a specialty in Regulatory and Government Affairs, reportedly has at least sixteen former employees working for the CFPB. Additionally, Goodwin Procter LLP, another national law firm, has at least eight former employees currently at the CFPB.
Raj Date, former Deputy Director of the CFPB, and a number of key staffers including the chief of staff and senior adviser for mortgage servicing, left for the private sector to start a consulting firm – Fenway Summer.
Fenway Summer advises clients on “business strategy, work[s] on mergers and acquisitions, and help[s] new firms that ‘have little more than an idea to start with.’” Date claims that it is “way too hard” for customers to get a good mortgage, but “Fenway Summer can change that. The company will tailor responsibly designed mortgages to credit-worthy customers poorly served by the current marketplace.” Among the CFPB’s first regulations were rules to prevent banks from providing mortgages to customers who do not have an ability to repay, tightening access to mortgages to many low-income borrowers.
It’s possible that financial regulators at the CFPB will simply create the regulations, leave the organization, and take their expertise to “cash out” in the private sector. The bureau has already expressed a problem with a high turnover rate from firms being “very interested in recruiting people who have CFPB experience.”
The list of agenda-driven employees goes on to include state Democratic Party officials, top donors to Senator Elizabeth Warren (a major proponent of the CFPB) and President Obama’s campaigns, and members of liberal academia. The Consumer Financial Protection Bureau may be independent of Congressional oversight, but it is seemingly not independent of special interests and partisan bias.