we need a watchdog, not a lapdog

President Obama appointed former Jeopardy champion and former Attorney General for the State of Ohio (a swing state) Richard Cordray to head the top consumer watchdog agency the Consumer Financial Protection Bureau at the White House on July 18, 2011. The Consumer Financial Protection Agency is set up much like what the Department of Homeland Security (DHS) is for law enforcement. The Consumer Financial Protection Bureau or CFPB will be a centralized department for consumer protection which was previously spread out amongst government agencies.

A primary task of this agency will be to make sure that correspondence between financial institutions and the public are written in a way that the layman can understand. It is also charged with addressing practices which may be less transparent to the consumer so they can better understand what is a good product or not. They will be educated to protect themselves in the marketplace.

I resent the fact that this bureau needs to be in place. That basic best practices are not created and maintained within the industry. However, it has been shown time and time again that the financial industry is unwilling or unable to make these types of ethical standards on their own.

“Self-regulation is to regulation as self-importance is to importance.”
— Willem Buiter

The President side stepped the logical choice for the position Professor Elizabeth Warren the Bureau was her brain child and she was the driving force creating it. Yet, because Republicans and those in the industry that would be regulated did not like that she wanted to do the job and not be dissuaded to water it down and do the usual “make it look like we’re doing something without actually doing something” that is so prevalent in the cesspool of American politics.

See more at http://www.elizabethwarren.com

The concern with the current path is that it becomes a drain on the tax-payer with mediocre at best results. Without Elizabeth Warren at the helm I am concerned that the CFPB will be more of a lapdog than a watchdog.  With Congress holding the financial leash. If Congress is influenced by the 10’s of  millions of dollars of lobbying they can merely strip the Bureau of needed funding to do its work. Sure Obama says he’s fighting now for the agency, but what about Presidents to come? Will they have the same passion to protect the consumer in the future?

“Deregulation is a transfer of power from the trodden to the treading. It is unsurprising that all conservative parties claim to hate big government.”
— George Monbiot

I love the idea of the CFPB. I think it is important that the consumer be offered a fair playing field on which to participate in the game of capitalism. I am just not sure that this is the way to get it done. I  saw on an MSNBC interview with Andrea Mitchell this morning that Professor Warren felt understandably fatigued and ready to spend time at home with her grandchildren. I would hope that she would be willing to head a well-respected non-profit agency. A watchdog for the watchdogs or lap dogs as I suspect they have a high risk to become.

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