The CFPB presents a semi-annual report to the President and Congress. We looked at highlights of the Fall 2015 report a few weeks ago. In that prior blog post we focused on the CFPB's scorecard and how it rated its performance since its last report. Today we want to share our insights as to how the CFPB views itself, its mission, its purpose.
The CFPB sees itself as “the” consumer focused agency of the Federal government. Its purpose is to ensure that consumers have timely and understandable information to make responsible decisions about financial transactions. To this end, the agency seeks to provide protection for consumers from unfair, deceptive, or abusive acts or practices, and from discrimination, among other harms and risks. And to do this, the CFPB seeks to enforce the Federal consumer financial laws aggressively. I think that this is a fair statement of how the Bureau sees itself.
For those with the advantage of some years, the CFPB sounds a lot like the U.S. Department of Justice in the 1960's. In fact, the parallels between the efforts of the Kennedy-Johnson-Nixon era Justice Department to enforce the nation's civil rights laws, and the Obama era CFPB to enforce the nation's consumer protection laws are remarkable. Both agencies consider it entirely appropriate to bring to bear their full enforcement powers of the law to carry out very similar missions—to provide protection for Americans from discriminatory and abusive conduct. Both the Justice Department and the CFPB evidence a fervor for enforcement. (It should be noted here that the Justice Department was and is subject to more Congressional oversight than is the CFPB.)
Director Cordray makes no bones about what he wants for the Bureau. He wants the CFPB to deliver a level playing field for the American consumer. In the semi-annual report, the Bureau states, “While the various divisions of the Bureau play different roles in carrying out the Bureau's mission, they all work together to protect and educate consumers, help level the playing field for participants, and fulfill the Bureau's statutory obligations and mission under the Dodd-Frank Act.” So called “reasonable regulations” are the tools that the CFPB seeks to employ in fulfilling this mission. We have seen numerous regulations adopted in the Bureau's short lifespan to carry forward the mission. But, it is the enforcement division that has carried the big stick.
It is also clear that the CFPB has visions of grandeur for itself. The Bureau says that it intends to build a “great institution.” It boasts about its 1486 “highly-qualified, diverse personnel.” Certainly there is nothing wrong with building esprit-de-corps. Many of us want to see similar strongly committed workers in our own businesses. However, understanding when to use the levers of one's power is an art often not attained by those relatively new to their positions.
It is going to be very interesting to see how the CFPB uses its considerable powers in the future, and whether a new Congress and a new President will choose to reign in the Bureau.