Washington's financial control law, Dodd-Frank, increases costs, decreases choices, and inconveniences consumers across the country. This ill-considered, "never let a crisis go to waste" legislation, as well as the regulations and administrative actions emanating from it, are products of the Washington-knows-best mentality.
The worst example of administrative overreach Dodd-Frank unleashed is the lofty-sounding Consumer Financial Protection Bureau (CFPB). The hubris that produced Dodd-Frank also characterizes the CFPB, and this is not lost on the people who have to operate their business according to the CFPB's arbitrary regulatory regime.
One Pittsburgh Realtor told me that the CFPB's regulations "do nothing but confuse people." She complains that her clients who are trying to obtain a mortgage have to "jump through hoops," and their loans are canceled for "stupid reasons." She added, "Evidently, no one who works in the industry created this stupid form of regulations. Real people, not bureaucrats, need to have input in this type of legislation, not a bunch of people that sit in Washington and make this stuff up, thinking they know what is best for us."
The CFPB makes it more difficult for one banker in Neffs, Pa., to provide customers with understandable information, much less the loans they need. Two different disclosure forms that Dodd-Frank spawned, one for the beginning of the mortgage process and one for the end, are "terrible," this banker told me. "No one understands them - not the lenders, attorneys, examiners and especially the customers."
Contrast the hardships, expenses, and limitations bankers, business people, and consumers face with the virtually limitless power CFPB regulators enjoy. The CFPB collects millions of dollars in fines and penalties, but there is no requirement that it actually disburse all the monies it receives to consumers who were harmed. The American people, through their elected representatives, have been completely cut out of this disbursement process.
The CFPB's unchecked power is even more difficult to accept considering its extravagant salaries and opulent office space across the street from the White House. You will be pleased to know that the top 100 employees at the CFPB earned salaries, on average and excluding bonuses, of more than $227,000, which is more even than the nation's highest paid governor. Thirty-nine employees at the CFPB earn more than our vice president, according to a recent report. This is a striking disparity. Elected officials tasked with leading the nation and the states are often paid less than the unelected bureaucrats at the CFPB.
During his inaugural address, President Trump observed: "For too long, a small group in our nation's capital has reaped the rewards of government while the people have borne the cost. Washington flourished - but the people did not share in its wealth."
My colleagues and I on the Financial Services Committee couldn't agree more with the president, and we believe the CFPB's actions exemplify this description of our nation's capital all too well.
Recognizing that the CFPB fails to live up to its mission of consumer protection any time it fails to protect consumer choice, our Financial CHOICE Act would make the agency more accountable to the people. We accomplish this by moving the bureau into the normal appropriations process, as opposed to the spigot of automatic funding, outside of congressional oversight, it receives from the Federal Reserve.
With increased penalties for Wall Street fraud and recognition of the need to protect access to financial products, the CHOICE Act will create a better environment, one where consumer protection does not come at the expense of consumer choice. Instead, the two would go hand-in-hand.