The Leadership Structure of the CFPB Must Change Soon

“With great power comes great responsibility.” This quote has been credited to various sources, ranging from Voltaire to the Spiderman comic books/movie. And whether you like to read philosophy books in your spare time, or find that superhero fare is more up your alley, you are undoubtedly familiar with this concept. If a person/organization is one that wields a lot of power and influence, then it must be responsible with that use of power. That means that is has to be accountable, reliable, fair and transparent in all of its actions. With all of this in mind, it is time for some of our leaders to do the right thing with regards to the leadership at the Consumer Financial Protection Bureau (CFPB.)

The CFPB has been called one of the most powerful, yet least accountable agencies in the United States. That, in and of itself, is bad enough. But when we take into consideration that this powerful, unaccountable organization is headed up by a single person, it is time to become alarmed. Richard Cordray is “the man” that heads up the CFPB. Journalists, elected officials and financial experts have all expressed concern over the apparently aggressive actions that the bureau has taken under the leadership of Cordray. Formed to be the physical embodiment of Dodd-Frank legislation, the CFPB operates with almost no oversight. And being under the budget of the Federal Reserve ensures that this organization has an almost limitless budget. Hmm… Little oversight plus a huge budget really does equal a bad situation for both American consumers and businesses, doesn’t it?

The fact that the CFPB is operated under a single director structure has been a concern since the bureau was first formed. Back in 2011, prior to assuming any of its current powers, Elizabeth Warren went on record with her support, saying, “The work facing the new bureau is very challenging; additional restrictions would undermine the consumer bureau before it even begins its work of protecting American families.” Warren was trying to make a case for the CFPB would be bogged down if its decisions were to go through a committee, instead of going directly to the desk of Mr. Cordray. A bit later, when Cordray was being confirmed, some Republicans got involved and argued that they would hinder any nominee for the CFPB’s director position if the leadership structure was not changed. They wanted the leadership to be a bipartisan committee. Unfortunately, however, these Republicans did not follow up on their threats.

Let’s be realistic here – if the CFPB were to switch over to a commission then any efforts the bureau takes would have more meaningful, longer-lasting effects due to the rules being put together by a bipartisan group of leaders. This would prevent the rules from being attacked when a change in power takes place. And don’t forget that the current state of the CFPB came to be under the sway of a Democratic president and a Congress controlled by Democrats. Cordray was nominated by Obama! If Republicans assume power, you can bet your bottom dollar that they will put a new director in Cordray’s chair – and that this person will have vastly different priorities and views on issues that the CFPB takes on.

Fair is fair. The CFPB is too powerful, has too much money and is susceptible to too much potential corruption/one-sided politicking to be run by a single person. It is the right time for Republicans – along with moderate Democrats to come together on this issue and to change the leadership structure for the CFPB to a more balanced, fair and accountable commission. That way all the power this organization holds can be tempered with true responsibility.

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