Via a filibuster, the Senate GOP blocked the nomination of former Ohio Attorney General Richard Cordray to be the head of the Consumer Financial Protection Bureau (CFPB). The GOP does not object to Cordray per se, but has vowed to block Obama from appointing anyone to head the Bureau. Without a director, the agency can not fulfill its role as the “cop on the beat” policing non-bank financial institutions, such as payday lenders” from actions that harm consumers. The interest rates places like these charge are currently more akin to the rate you would get from a loan shark than from a bank, often amounting to more than 400% per year. However often those rates are buried in type you need an electron microscope to read. Without the CFPB enforcement of consumer protection laws in the financial arena is spread among seven different regulatory agencies, none of which is primarily charged with consumer protection, and hence it is not a top, or even a middle, priority for them.
The creation of the CFPB was one of them most important elements of the Dodd Frank law that reformed the oversight of financial institutions in the wake of the 2008 meltdown. Predatory lending practices, most notably by non-bank financial institutions, (the shadow banking system) were central to the inflation and them busting of the housing bubble. The creation of the CFPB was vital, and it is now vital that it be allowed to operate. At the very least, Cordray deserves an up or down vote.
