Hey, House Financial Services Committee: The CFPB is Accountable – to Consumers

Financial Services Regulation, Uncategorized

The Consumer Financial Protection Bureau, despite critics’ claims that it lacks accountability, is actually very accountable – to consumers. ‘Accountability’ remains a political talking point, despite its having little to no defined relevance to what one is actually saying. This is troublesome because as the word is misused, its significance is deflated; defining accountability in a true sense becomes ever so obscure when the term is vandalized. There are numerous factors contributing to this overall degradation in the quality of political speech from bipartisanship to Citizens United, but there is something very ironic in that accountability itself must be held true to standard by only average citizens of the public. Otherwise, it is lost to rhetoric and unspecific political smack talk worthy of nothing besides entertaining cable TV news debates.

To be accountable, one must first have control over that which they are accountable for. The Director of the CFPB can only be removed by the president on the basis of ’cause’, which, although a loose definition, is concise because the president’s legacy is often shaped in hindsight as a result of society’s general health and well-being. The president, in general terms, is obligated to provide for a diverse people who benefit broadly from his or her policies while in office. On the other hand, Congress is liable primarily to its constituents, with the general public’s well-being coming secondary to that which benefits each Congressperson’s constituency. Because they are elected by their constituency, individual members of the legislative body are free to support laws only that benefit his or her constituency. This segregation among varying interests is designed to promote fair and unassuming representation in our legal system. Hence, democracy.

However, few people truly believe that constituencies are equipped with full capability to hold their Congresspersons responsible for his/her actions on The Hill, in part because of the ramifications of Citizens United and its role in shaping electoral outcomes with its no-ID-required unlimited campaign spending. When campaign contributions are unlimited and made in secret, campaign objectives are inevitably secretive as well. As a nation economically driven by capitalism, it is a widespread understanding that vast accumulation of resources is the end goal for all. Accumulation of resources is what authorizes purchasing power, and it even creates purchasing power in the case where there was previously none. Acquiring wealth is an invariable goal of all who participate in economic capitalism, hence ‘capitalism’ being named the functionality of capital.

The CFPB strives towards egalitarian liability, despite its seeming flaws. If it were unaccountable, as House Financial Services Committee Chairman Jeb Hensarling (R-TX) states, then it would not be required to present semiannual reports to Congress on consumer complaints and financial literacy. The director would not be subject to term limits by presidential nomination every 5 years. The entirety of its actions would not be subject to full judicial review and its enforcement subject to authorized preceedings by any U.S. Court of Appeals. The spectrum of the CFPB’s accountability is diverse – every branch of federal government has a method of enforcing or denying CFPB restrictions, and even the general public is given a forum for making compaints public, via the requirement that the CFPB submit reports to Congress on consumer complaints and widespread cost-benefits analyses of their proposals. This is a unique approach to assessing their public efficacy; other regulatory bodies are open to industry complaints alone; the CFPB is open to that and consumer complaints. Additionally, other financial regulators have the authority to step in and challenge CFPB regulations when they deem them unfit.

Regulation is rarely a popular idea, particularly in the capitalistic mindset of the American economy. However, ‘accountability’, by definition, is precisely what is bestowed upon this agency as its actions are subject to review by various interests. To say that this agency is ‘not accountable’ is either an admission of ignorance, or it is a misconstruation of to whom they are accountable. Regardless of the various parties who are involved in the CFPB, it is incongruous to say that this agency is anything but publicly accountable.

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