Brains

"Brains by camerato, on Flick

Once upon a time there was a concerted effort to prevent the officials charged with regulating the financial industry from doing their job. That effort was extremely fruitful and the result was a worldwide economic catastrophe. Of course, the wingers learned their lesson and never would do such an irresponsible thing again. That last sentence is the fairy tale.

Once again, the recipients of big money from the financial industry are trying to keep its operations above the law so that the consumers will be deprived of protection. In attempting to hamstring the Consumer Financial Protection Bureau, once again the right wing will be okay with outright fraud, and the resulting economic chaos, as long as it will enable their contributors to make profits. Attacks against the CFPB are coming on a daily basis, as the right tries to make the world safe for theft from financial consumers.

Don’t let this concerted rightwing smear campaign—straight out of their stale playbook—distract from the facts.  These daily hit-jobs on Warren and the CFPB are designed to do one thing only: lay the groundwork to limit the agency’s funding and autonomy and, consequently, its power.

Currently, the bureau is funded through the Fed—just as all bank supervisory agencies are independently funded—in order to avoid politicizing its mission by subjecting it to Congressional appropriations.  Yet the GOP would like to create a different set of rules for the CFPB.  That’s why Texas Republican Representative Randy Neugebauer has introduced legislation to house the CFPB in Treasury so that Congress can control the purse strings. He didn’t try to hid his objective, saying the move would allow Congress to “have some say-so on how big this organization gets and some of their activities.”

Warren addressed this issue squarely in a recent speech, “While the banking regulators charged with preserving the safety and soundness of financial institutions and ensuring consumer protection compliance by smaller banks would continue to receive independent funding, the agency in the financial regulatory system with lead responsibility for protecting consumers would face a different set of rules – rules that threaten its independence.”

Sweeping changes were promised after the recent meltdown of our system caused by toxic assets, an invention enabled by regulation that had been melted down first. The promises are another fairy tale, coming from a right wing that has lost any taste for responsibility.

While the world struggles back from the deregulatory swamp that hollowed out our investments until they were worth a fraction of their original value, the financial institutions that created this disaster are doing just fine. Since they are unscathed, their operators have concluded that all’s right with the world as long as they can escape the consequences.

Laws are the enemy to aspiring cheats. The very creators of the fraudulent investments too many investors bought up – thus losing savings they’d entrusted to the cheats – are charging forth to create fraudulent investments once again. Standing in their way is an agency created to protect the consumer of their toxic vessels. Naturally, the potential cheats will try diligently to bring down the agency set up to prevent their cheating investors again.
For anyone who watched the hearings that produced the FCPB, Chairperson Warren is well known for listening seriously to the right wing’s tag lines about reducing taxes as the ideal way to stave off financial ruin – despite that by that method they had produced that same financial ruin – then proceeding on to act inside the realm of real facts. By her guidance, a ‘bipartisan’ commission that included wackos like Jeb Hensarling, of Texas highwayman banker distinction, actually produced a workable plan to rebuild investors’ safe conduct through the miasma of deregulated and bundled financial consumer products.

It’s an old, tried and true, way of identifying thieves in the making, that they earnestly commit themselves to bring down the Rule of Law that would stand in their way. Sadly, our large banks have joined in that ethical downfall, by allying themselves with profits rather than depending on a reputation of soundness. The standard of sound practice kept smaller local banks for the main part within guidelines that sustained them during the recent financial meltdown.

Of course, as long as a business needs to pass itself off as serving its clients’ interests, while in reality it’s interested primarily in its own bottom line, the client is the main victim of its practices. Membership banks, a.k.a. credit unions, have the client as the main beneficiary instead of a bottom line that is their enemy, and are a far, far more trustworthy financial institution than any non-local, for-profit, bank.