CFPB still too powerful? Blame Wells Fargo

by Ryan Smith16 Sep 2016
The recent Wells Fargo debacle, in which the bank was found to have opened 2 million unauthorized accounts, isn’t just a blow to the bank or its customers. It may well also have killed any hope of weakening the Consumer Financial Protection Bureau.

That’s the take of Brian Gardner and Michael Michaud, executives at investment bank KBW. Quoted in a Barron’s article, Gardner and Michaud said that the news about Wells Fargo’s sketchy behavior “will impact policy debates beyond the impact on the firm.”

“We think the news will affect efforts to change the structure and legal powers of the CFPB (all but killing the chances on making changes), increasing the chances of breaking up large banks, pressuring regulators to reject living wills, and pressuring regulators to toughen proposed rules on executive compensation,” they said.

Gardner and Michaud think the negative headlines from Wells Fargo’s $185 million settlement in the matter will kill congressional will to change the structure and authority of the CFPB. The bank’s behavior gives CFPB defenders “significant leverage to block any efforts to waken the CFPB’s regulatory powers, change its management structure to a commission, or require that its budget come from Congress rather than the Fed” – all longstanding demands of the agency’s detractors.

In fact, according to Gardner and Michaud, CFPB critics can only hope a federal appeals court in PHH’s current litigation with the CFPB finds the agency’s structure is unconstitutional. Otherwise, they said, “there is no chance that the CFPB’s power or structure will be altered.”


  • by | 9/16/2016 12:16:47 PM

    No blame the DEMOCRATS AND OBAMA FOR THIS POWERFUL MACHINE they opened the CFPB under the Dodd Frank act. Only one man runs the CFPB , Richard Cordray. The CFPB can write new laws with out the house , senate , or the presidents signature which this has never been in our history until Dodd , Frank came along . This is true read about it. The republicans want at least 6 judges to approve new laws not this one person Cordray who now runs the banking and finance businesses in our country ONE PERSON. This is not capitalism which our country was built. Obama promised change which is now in some areas socialism and communism. Clinton wants to make the CFPB more powerful , Trump wants to dismantle the CFPB. Now you figure out who's the more of the evil one. All of this is true read about it. Wells Fargo would have been stopped and fined with out the CFPB , who likes to audit and destroy businesses. TRID was put into law by the CFPB and more laws will come. The CFPB wants to shut down pay day lending stores what right do they have to shut it down . We the people should shut it done not Richard Cordray. If we the people do not like pay day lending stores then don't go there and take out a mortgage. We do not need Richard Cordray and his CFPB army telling us what businesses are good and what are bad. WE THE PEOPLE SHOULD AND MUST MAKE THESE DECISIONS NOT ONE MAN. The CFPB must be STOPPED. Vote Trump he will stop it

  • by Bob | 10/12/2016 6:27:55 PM

    The CFPB is a joke just aske borrowers trying to get financing for a home I am in the mortgage banking field and let me tell you the borrowers are ripping mad , what we put them through is madness


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