Ed's Blog

CFPB Appoints Task "Farce" On Consumer Law

By Ed Mierzwinski
Senior Director, Federal Consumer Program

Last week, CFPB Director Kathy Kraninger appointed four lawyers and professors to a "Taskforce on Federal Consumer Law." To my knowledge, none have worked for consumer protection organizations yet all have worked as industry lawyers or consultants or been publicly aligned with industry views. All do have previous government experience, primarily at the FTC. However, I am also aware of several distinguished professors, including some with CFPB experience, who were all rejected. Coincidentally, these rejected professors all do have a record of working to defend consumers in the financial marketplace. 

Incredibly, the October announcement of what is more appropriately called a Task Farce claimed inspiration from a distinguished bi-partisan commission "established by the Consumer Credit Protection Act in 1968." 

That commission's final 1972 report recommended "significant additions to the protection of consumers" including the "establishment of a Consumer Protection Agency [with] a unit to be known as the Bureau of Consumer Credit (BCC)." I fear that this supposed task force is biased to recommend the opposite. There is no one here to offer even a neutral, let alone dissenting, view.

In Washington, people talk about "optics" and "spin." What I see clearly is that the purported "Task Force on Federal Consumer Law" is spinning in the industry's orbit.

That 1972 report of the distinguished bi-partisan commission recommended that a CFPB (independent Consumer Credit Agency) be created, even if a broader Consumer Protection Agency was not:

Congress create within the proposed Consumer Protection Agency a unit to be known as the Bureau of Consumer Credit (BCC) with full statutory authority to issue rules and regulations and supervise all examination and enforcement functions under the Consumer Credit Protection Act, including Truth in Lending; an independent Consumer Credit Agency be created in the event that the proposed Consumer Protection Agency is not established by Congress; the independent agency would have the same functions and authorities recommended for the Bureau of Consumer Credit.

The CFPB was a good idea in 1972, was a great win for consumers and fair financial markets in 2010 and is still a good idea in 2020, despite its recent efforts to protect payday lenders (why?) and debt collectors (really?), encourage dangerous exceptions for fintech firms and throttle down its enforcement efforts on behalf of consumers.

On the other hand, a one-sided, industry-centric, supposed "taskforce on federal consumer law," with no consumer advocates or disparate points of view at all, will always be a farce. 

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