Treasury will probably recommend stripping CFPB’s powers – report

by Ryan Smith13 Jun 2017
The Treasury Department is expected to recommend stripping some power from the Consumer Financial Protection Bureau in a report due out this week.

The report comes as the result of an executive order issued by President Donald Trump in February. In the order, Trump instructed the Treasury to examine current financial regulations.

The report is extremely critical of the CFPB and recommends that the agency be stripped of its power to examine financial institutions, reported Fox Business, citing sources familiar with the matter.

The Treasury report’s recommendations aren’t as sweeping as the changes in the Financial CHOICE Act, according to Fox Business. The Treasury is likely to recommend that the agency continue to be led by a single director – a key sticking point with congressional Republicans – but that the president have the authority to remove the director at will.

The Treasury report also contains recommendations on the Volcker rule, which prohibits banks from most trading or speculation unless it’s done on the customer’s behalf. According to Fox Business, the Treasury will most likely recommend that banks with less than $10 billion in assets be exempt from the rule. However, it isn’t likely to recommend repealing the rule altogether – which the Financial CHOICE Act would.

Trump has pledged to cut regulations by 75%. In a meeting earlier this year, he pledged to give the controversial Dodd-Frank Act “a major haircut.”


Related stories:
Consumer advocacy group slams Financial CHOICE Act
CFPB slaps servicer with $1.5 million penalty
 

COMMENTS

  • by Sharon Heyden | 6/13/2017 11:40:58 AM

    It will be a sad day if the CFPB is dismantled. They have brought accountability to the lending industry and without them I certainly would not have been able to save my home after the death of my husband.

    Had it not been for the bottom feeder's in this industry by putting folks into homes who clearly would not have qualified, the oversight of the CFPB would not have been an issue.

    The demise of the lending industry was witnessed back in the Norwest Mortgage days, when Wells Fargo was buying out Norwest and World Savings - I played an integral part in the appraisal review process and found the majority of the appraisals overvalued. Add that to Washington Mutual's putting more than one 1st trust deed on a single parcel (so that the mortgage officer could get paid for two mortgages.... it was a 2 on 1 property).... there was just no accountability. And let's not forget Countrywide's part in all this by lending to anyone with a pulse. I had a representative from Bank of America telling me that they routinely forged bank statements for qualifying purposes of non-eligible borrowers. Believe me - I stayed clear away from that person. It was just too scary to witness all the fraud.

    The truth of the matter, only lend money to folks who can afford to make the payment, simple as that. There will always be an element of people where tragedy strikes and can't make their payment anymore, but that would be the exception, not the norm.

    As a representative at World Savings once told me during an open house... these banks were set up to fail.

    Only the threat of the CFPB and their fines - have brought accountability and stability back to the lending industry.

  • by Grant Lexine | 6/13/2017 10:59:02 PM

    Regardless of whether you think CFPB brings TOO much regulation, TOO little or has it exactly right, its structure where one person is all powerful, can ignore courts and treat judges orders as "suggestions", breaks the bounds of common sense and good governance.

    The CFPB and its head is accountable to no one. At minimum, the CFPB should have an appointed board and be accountable to congressional oversight.

    Enforcement must be tempered by a balanced mission of accountability from business and consumer responsibility. Fine and levies must be based on infringement and damage, not "how deep can an agency reach into the target's pocket".

    Further, everyone should lookexamine the distribution of funds collected by levy from the CFPB. An amazingly small percentage goes DIRECTLY to members of the public who were damaged by the companies fined. A staggering amount is doled to coffers of highly political "community action" groups as grants for "public education".

    There should NEVER be distribution to any group of any kind from such an agency. When distributions are awarded, it is automatically political by nature. The agency will lose sight of its consumer protection mission, disenfranchising one group, to empower another.

    The apolitical method would be for fines and levies to cover cost of operation first, then to make whole those directly damaged and if any residual funds remain, then returned to the public treasury which is equitable to all citizens, regardless of political persuasion.

    Good governance with elected officials is a gut-wrenching, tedious process. Good governance without accountability of the ballot box is a historical rarity with centuries and centuries between examples.

  • by AZKid | 6/20/2017 1:39:51 PM

    Dodd-Frank should go. It has penalized small community banks that are the strength of building small communities. It was created out of shifting the blame away from the government for creating the lax lending scene to house the marginal productive in society.

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