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Apparently Consumers Don't Need Protection against Financial Industry Abuse Anymore

This is a follow up to our post in November about the Trump administration's take-over of the Consumer Financial Protection Bureau, or CFPB. Last month, former director Richard Cordray resigned, opening the way for a Trump appointee.

As we wrote then, the CFPB's mission is to regulate banks, lenders, loan providers, and related businesses in an effort to "protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law," but the mission is now in jeopardy.

In the wrong hands, the CFPB could suddenly become much less effective at its job, or perhaps even be abolished altogether, as its opponents have called for.

Why all the fuss?

Perhaps the opposition comes from the CFPB's having amassed $11.9B from its enforcement actions, as it explains on its website, in its mission to hold businesses accountable for illegal practices.

And the latest news comes via The Intercept.

David Dayen writes that the issue of who ultimately controls the CFPB - and thereby determines its future as a regulatory and enforcement agency - is far from settled.

Deputy Director Leandra English sued to block Trump's appointee, Mick Mulvaney, from assuming his role as director, arguing that she is acting director by law (as per the post-Great Recession Dodd-Frank legislation, which authorized the CFPB to begin with). English essentially argues that Trump's appointment of Mulvaney, a White House staffer, is illegal, and she may be right.

No wonder some folks don't like the CFPB

The CFPB's creation under the Obama administration (the first federal agency of its kind) was widely held to be a necessary response to what many viewed as financial industry abuses, ala subprime mortgage lending and packaged securities that weren't worth the digital bits that represented them. In short, the CFPB was a response to behavior that contributed (perhaps directly caused) the Great Recession in 2008.

But the CFPB has never been entirely free of criticism, ever since its founding in the summer of 2011, and this criticism continues today, under a much different presidential administration and with Congressional Republicans enjoying majority rule.

In fact, the word "crosshairs" has been circulating for some time, and if Mulvaney assumes control (though that's far from certain at this point), we should expect the CFPB to remain firmly within the crosshairs.

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