Those of us who work in the industry, though, have definitely felt at times that the CFPB has overreached its bounds. I often wonder whether or not the pendulum has swung too far in the other direction. There is an extent to which we as an industry failed ourselves and needed intervention, but perhaps things have gone too far. Perhaps we need to have a little more freedom again.
Regardless of the perspective you take, there is one thing that's troubling about the CFPB. On the August 31 broadcast of my Lykken on Lending
radio show, my colleague Alice Alvey made the excellent point: the CFPB is accountable to no one. The organization doesn't really have to answer to anyone for the policies they create and the decisions they make. Whether or not they've gone too far as of yet, without the proper checks and balances, I would guess that they probably will eventually.
Power without accountability is the road to disaster. We saw it in our own industry just before the financial crisis--and that's the reason why the CFPB had to be created. But, if something isn't done soon, we'll see it in the CFPB all the same. No one is immune from corruption; we're all capable of going too far. And that's why we need accountability. Where there is accountability, there can be trust.
For the past several years, the CFPB has played an influential role in the workings of the mortgage industry and the attempt at recovery from the recent financial crisis. I wouldn't doubt that the creation of the CFPB has done some good. A recent report, for example, indicates that anxiety in home buyers has greatly diminished since the creation of the CFPB.