Lincoln * Institute

Colin A. Hanna

Colin A. Hanna

President
Let Freedom Ring, USA

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Let Freedom Ring

Abolish the CFPB

by Colin Hanna
 

One of the most obvious means of shrinking the size of the federal government is to eliminate some of its agencies. Although many champions of limited government, including former President Ronald Reagan, have called for the shutting down of various federal agencies to reduce wasteful government spending, it hardly ever happens. The Trump administration now has a perfect opportunity to close the corrupt and ideologically partisan Consumer Financial Protection Bureau (CFPB). This is an opportunity that conservatives cannot allow our political leaders to waste.

In September of 1981, President Ronald Reagan appeared on national television to outline his plan for reducing the size and scope of the federal government. He stated: “As a third step, we propose to dismantle two Cabinet Departments, Energy and Education ... There’s only one way to shrink the size and cost of big government, and that is by eliminating agencies that are not needed and are getting in the way of a solution.”

For over three-and-a-half decades since President Reagan called for abolishing those two federal agencies, conservatives have continued to talk-the-talk but not walk-the-walk. Granted, abolishing a federal agency is no easy feat, but today we have a real opportunity to abolish the hyper-partisan, anti-market CFPB �" the brainchild of the liberal Senator from Massachusetts, Elizabeth Warren.

With each passing day, we are learning more and more about how Sen. Warren’s agency has acted as a partisan wing of the Democratic National Committee, rather than an independent agency representing of the needs of consumers.

A key opponent of burdensome government regulations, Mick Mulvaney, is now the acting-director of the agency. President Trump has said repeatedly that he wants to see an end to overregulation, and Congressional leadership has already begun chipping away at the CFPB by using the Congressional Review Act (CRA) to repeal the agency’s recently enacted arbitration rule.

Senate Democrats, sensing their pet agency may be in danger, have already issued a letter to President Trump calling for a CFPB director with “...bipartisan support and a track record of being tough on big banks and other financial firms that rip off consumers...” and “...a Director who will fight for consumers allows the CFPB to continue its work without political interference,” a request dripping with irony given the agencies documented pro-Democratic partisanship. Senate Democrats also made reference to director Cordray as an “effective partner” in the letter.

This is the same Director Corday and CFPB that, according to the New York Post, “bounced business owners and industry reps from secret meetings held with Democrat operatives, radical civil-rights activists, trial lawyers and other ‘community advisers,’”... and “funneled a large portion of the more than $5 billion in penalties collected from defendants to community organizers aligned with Democrats...”

This is also the same CFPB were agency workers gave 593 political donations to Democrats and just 1 to a member of the Republican Party.

This doesn’t sound like a bipartisan or effective entity protecting consumers.

Some observers, who want to distract or derail conservative efforts to dismantle the agency, may try to point out that a piecemeal approach to getting rid of the CFPB is already underway.

The CRA process has already been used to repeal the arbitration rule and acting-director Mulvaney has signaled to Congress that the same process should be used to repeal the small-dollar loan rule that was just issued. In fact, a bipartisan group of lawmakers just last week introduced a resolution that would do just this.

Another idea that has been advocated to end the CFPB’s abusive practices is to use the Paperwork Reduction Act of 1980 as a means to render CFPB regulations unenforceable. And, Mulvaney has already put into place a 30-day freeze on rulemaking �" as well as new hires. But we cannot let history repeat itself and just be satisfied with a piecemeal approach. Promises to abolish an agency are made, and those promises have not been kept.

Treasury Secretary Steve Mnuchin said in October on FOX News, regarding the future of the CFPB, “I think it has a future but it has a future in a small, significantly smaller way. Consumer protection is important but we’ve got to get rid of a lot of rules that are hindering their economy and growth.”

Yes, we need to get rid of onerous regulations, but even better is to dismantle the source of those regulations or risk future administrations restoring the corrupt power of the CFPB. It is time for President Trump and conservatives in Congress to truly get serious about abolishing the CFPB before it becomes just another cheap election year rallying cry.

Colin Hanna is President of Let Freedom Ring, a non-profit, nonpartisan public policy membership organization, with a three-pronged mission to promote constitutional government, economic freedom, and traditional values.