No Wonder Richard Cordray Wanted To Choose His Successor!

The Gateway Pundit is reporting today that a whistleblower within the Consumer Financial Protection Bureau (CFPB) has come forward. According to her statement, falsified information was used against certain businesses, and then the money obtained by fines was funneled into left-wing groups.

The article reports:

In a letter to Attorney General Jeff Sessions, former CFPB staffer Cassandra Jackson, accused the agency’s managers of “widespread racism and gender discrimination.” Jackson also accused the agency of forcing her to falsify evidence to justify fines against a pay-day lender. 

…“I was specifically told to cite Ace Cash Express for a violation for which I had verified the company was in compliance and to state that Ace Cash Express did not provide, and that the CFPB did not receive, documents that would have satisfied the CFPB’s guidelines, despite having received that information from Ace Cash Express,” Jackson wrote to Sessions.

“I encourage you to initiate an investigation into this matter, as well as civil rights violations at the Consumer Financial Protection Bureau,” Jackson said. “During my nearly five years at the Bureau, I encountered widespread racism and gender discrimination from management,” added Jackson.

The article concludes:

Everything from amassing secret ledgers to using penalties to ‘launder,’ funds into left-wing causes. Of course, because the CFPB operates independently of the U.S. Government, a full audit of the agency’s balance sheet have never been done. This sad reality may very well change under Mulvaney’s leadership.

The agency “Funnelled a large portion of the more than $5 billion in penalties collected from defendants to community organizers aligned with Democrats — “a slush fund by another name,” said a consultant who worked with CFPB on its Civil Penalty Fund and requested anonymity.”

Advocacy group, The U.S. Consumer Coalition, was the source of Jackson’s damning letter.

“Ms. Jackson is a dedicated public servant who believes in the mission of the CFPB,” said Brian J. Wise, president of the U.S. Consumer Coalition. “Unfortunately, her claims are all too familiar to the dedicated employees serving under the direction of CFPB management,” wrote a spokesperson for the organization.

Does anyone believe that had Richard Cordray been able to name the agency’s deputy director, Leandra English, to succeed him that any of these practices would have changed. Now because President Trump has appointed Mick Mulvaney, currently the White House budget director, as interim director of the CFPB, there is a chance that some of the questionable (if not illegal) practices of the CFPB will end. The CFPB is part of the swamp that needs to be drained.

How The Consumer Financial Protection Bureau Was Misused For Political Purposes

On Saturday, The New York Post posted an article about the impact of President Trump’s drastic cutting of government regulations.

The article reports:

Last week, the White House finally wrested control of the mammoth regulatory agency following the resignation of CFPB Director Richard Cordray, an Obama appointee and liberal Democrat who quit his special five-year post early to run for Ohio governor. Trump installed his conservative budget director, Mick Mulvaney, to temporarily take over the powerful agency — which has the authority to determine the “fairness” of virtually every financial transaction in America.

On his first day on the job, Mulvaney instated a 30-day freeze on all new hiring and regulations at the CFPB, triggering a collective sigh of relief from the financial industry.

So what sort of activity has the CFPB been involved in?

The article reports:

  • Bounced business owners and industry reps from secret meetings it’s held with Democrat operatives, radical civil-rights activists, trial lawyers and other “community advisers,” according to a report by the House Financial Services Committee.
  • •Retained GMMB, the liberal advocacy group that created ads for the Obama and Hillary Clinton presidential campaigns, for more than $40 million, making the Democrat shop the sole recipient of CFPB’s advertising expenditure, Rubin says.
  • •Met behind closed doors to craft financial regulatory policy with notorious bank shakedown groups who have taken hundreds of thousands of dollars in federal grant money to gin up housing and lending discrimination complaints, which in turn are fed back to CFPB, according to Investor’s Business Daily and Judicial Watch.
  • •Funneled a large portion of the more than $5 billion in penalties collected from defendants to community organizers aligned with Democrats — “a slush fund by another name,” said a consultant who worked with CFPB on its Civil Penalty Fund and requested anonymity.

What’s more, CFPB has secretly assembled giant consumer databases that raise individual privacy as well as corporate liability concerns. One sweeps up personal credit card information and another compiles data on as many as 230 million mortgage applicants focusing on “race” and “ethnicity.” Yet another database of consumer complaints contains more than 900,000 grievances against named financial companies without any vetting to determine their merit, points out Alan Kaplinsky, lead regulatory compliance attorney at Ballard Spahr LLP.

Do we really want to use taxpayers’ money to continue to fund the CFPB? This agency is truly a threat to our existence as a viable constitutional republic.

 

 

Do Some Democrats Even Read The Law?

The Conservative Treehouse posted an article today about the change in leadership at the Consumer Financial Protection Bureau (CFPB). The current director, Richard Cordray, is resigning from the position. There are some constitutional problems with the CFPB, in that it is accountable to no one–not even the voters.

The article reports:

A federal court found the CFPB Director position held too much power and deemed it unconstitutional. The court decision noted that giving the President power to fire the Director would fix the constitutional problem.

Senator Elizabeth Warren is complaining that with the resignation of Cordray, the directorship should automatically go to the Deputy Director. Instead, President Trump is planning to appoint Mick Mulvaney as temporary head of the agency until a permanent person can be appointed. Senator Warren has tweeted that this is unacceptable.

However, the article goes on to explain why President Trump’s appointment of a temporary director would be legal:

President Trump has power to appoint the interim or ‘acting‘ head of the agency in the case of a vacancy just like he would any other vacancy. [Important Reminder: A DC appellate court already ruled the legal issues with the CFPB Director position necessitate oversight by the executive branch.] The President fills the vacancy using the familiar mechanism of the Federal Vacancies Reform Act (FVRA); until such time as a permanent replacement is nominated and confirmed by the Senate.

The Dodd-Frank statute Warren cites doesn’t provide a mechanism in case of vacancy. It has a provision for when the Director is “absent” or “unavailable”, both considered temporary terms by design, but not when the Director-ship is “vacant”.

The resigning director, Richard Cordray, (who resigned from a confirmed position) cannot appoint his replacement; that responsibility falls to the President.

Nowhere in Dodd-Frank statute does congress say they are repealing Federal Vacancies Reform Act for the Consumer Financial Protection Bureau. Therefore FVRA applies to CFPB regardless of whether Senator Warren likes the designated person assigned, or not.

Please follow the link to the original article to read the entire story. It is much more colorful than what I have posted here!

Wise Advice From The People Who Know

Yesterday Investor’s Business Daily posted an editorial about the Consumer Financial Protection Bureau. This bureau was part of the Dodd-Frank legislation aimed at taking the focus away from the actual cause of the financial meltdown of 2008.

For those of you who are new to this website, the following video is the best analysis of the financial crisis of 2008 available. I have embedded it because at some point YouTube will probably take it down.

Dodd-Frank put a stranglehold on business growth and punished people who were not responsible for the crisis. However, those who like big government and wanted more power pushed the narrative that resulted in Dodd-Frank and the Consumer Financial Protection Bureau.

The current head of the Consumer Financial Protection Bureau, Richard Cordray, has announced that he will resign at the end of November. Investor’s Business Daily suggests that instead of naming a replacement, President Trump should simply shut the agency down.

The editorial at Investor’s Business Daily reminds us of some of the history of the agency:

An October 2016 Supreme Court ruling found CFPB’s structure to be unconstitutional, a violation of the separation of powers in the nation’s supreme law.

One element of the high court’s decision was that Cordray could only be fired by the president for cause — making it very hard to get rid of even an incompetent in the job. Worse, by funding the CFPB from the Federal Reserve, not Congress, the agency lay just outside the direct oversight of Congress. It had massive power over finance in the U.S. economy, with little or no accountability. Cordray did little or nothing to remedy this.

“We are long overdue for new leadership at the CFPB,” said House Financial Services Committee Chairman Jeb Hensarling of Texas. “The extreme overregulation it imposes on our economy leads to higher costs and less access to financial products and services, particularly with lower and middle incomes.”

The editorial concludes:

From nothing in 2010, the agency now employs more than 1,600 people, with $647 million in budgeted spending last year and another $525 million in civil penalty fines — often collected without any due process for those who were forced to pay up.

Last January, Michael McGrady wrote on The Daily Caller website, “Like every new government program, (CFPB) became a corrupt political bargaining chip in Obama’s administration with the sole mission to assert government supremacy over the economy.” Nothing has changed since then. As we’ve said before, shut it down.

Think of the savings for taxpayers!

The Next Economic Bubble Is Growing

Yesterday The Star Tribune posted an article about the rising number of student loan defaults.

The article reports:

A new analysis of federal student loans reveals the number of people severely behind on repaying their debt has soared in the last year, painting a bleak picture of one of the largest government programs.

The Consumer Federation of America released a study Tuesday that found that millions of people had not made a payment on $137 billion in federal student loans for at least nine months in 2016, a 14 percent increase in defaults from a year earlier. The consumer watchdog used the latest data from the Education Department, which manages $1.3 trillion in federal student debt owed by 42.4 million Americans.

 What’s striking about the findings is that Americans have a variety of repayment options to avoid default. The Obama administration expanded programs that cap monthly payments to a percentage of earnings, but even though millions of people are enrolled in those income-driven plans, there is still a disconnect.

“Despite a rising stock market and falling unemployment, student loan borrowers are still struggling,” said Rohit Chopra, a senior fellow at CFA and former student loan ombudsman at the Consumer Financial Protection Bureau. “The economy remains very difficult for so many young people just starting out.”

In recent years, as more money has become available for college loans, the cost of college has increased at levels higher than inflation. Students have also pursued degrees in subjects that may not translate well into the marketplace. The combination has created an increasing debt with a decreasing ability of students to pay back that debt.

It’s time to let banks and other financial institutions handle student loans. Historically, banks and financial institutions loan money to people with the expectation that the money will be paid back. They are careful in their lending practices. Scholarships should be made available to worthy students who cannot qualify for loans. It is time for colleges to bring their tuition into line with the overall cost of living so that students are not taking out loans they cannot afford to pay back.

It’s Time To Get Rid Of A Bad Idea

On Friday, Investor’s Business Daily posted an article about plans by Republicans to redo some of the reforms put in place after the 2008 housing bubble crash.

The article reminds us of the lies that were told in order to create the Dodd-Frank reforms and the Consumer Financial Protection Bureau (CFPB).

The article reports:

One of the great follies of the 2010 Dodd-Frank reforms is that it let Democrats pretend that “Wall Street greed” was to blame for the financial crisis. In a brilliant bit of jujitsu, Democrats used that false narrative to create a mass of new regulations — and a new super-regulator, the CFPB, giving it sweeping, near-dictatorial and likely unconstitutional regulatory control over nearly all lending in the U.S., from major mortgage lenders to payday lending shops.

It was created under false pretenses. The fact is, government, not Wall Street, was to blame for the crisis. Research by Edward Pinto, former executive vice president and chief credit officer for Fannie Mae, found that by 2008 more than half of all mortgages in the U.S. were subprime or otherwise risky, and 76% of those were on government agencies’ books. And it is an indisputable fact that, from the Clinton administration on, government regulations required banks to lend to uncreditworthy borrowers, or face stiff penalties.

“This leaves no doubt that government housing policies — and not a lack of regulation — created the demand for these risky mortgages,” wrote American Enterprise Institute Senior Fellow Peter Wallison, who sat on the government’s 2009 Financial Crisis Inquiry Commission, the official investigation into the crisis.

The article reminds us that since the creation of the CFPB in 2010, there has been a near-decade long credit slump which has crippled the nation’s financial industry. Both Dodd-Frank and the CFPB have severely hurt economic growth in America.

The article concludes:

We’re happy to see that Congress wants to seriously reform the CFPB. We’d be even happier if they just got rid of it.

That is a wonderful idea.

For an honest history of the housing bubble, I strongly recommend this video:

 

When The Government Acts Like The Mob

The New York Post posted an article today about the Consumer Financial Protection Bureau.

The article reports:

Newly uncovered internal memos reveal the Obama administration knowingly exaggerated charges of racial discrimination in probes of Ally Bank and other defendants in the $900 billion car-lending business as part of a “racial justice” campaign that’s looking more like a massive government extortion and shakedown operation.

So far, Obama’s Consumer Financial Protection Bureau has reached more than $220 million in settlements with several auto lenders since the agency launched its anti-discrimination crusade against the industry in 2013. Several other banks are under active investigation.

That’s despite the fact that the CFPB had no actual complaints of racial discrimination — it was all just based on half-baked statistics.

A confidential 23-page internal report detailing CFPB’s strategy for going after lenders shows why these companies are forking over millions of dollars in restitution and fines to the government despite denying any wrongdoing.

Ally Bank was willing to settle on paying $98 million rather than the $204 million the government had initially requested. Why were they willing to pay at all? The FDIC was looking at charges of ‘red lining’ at the time the suit was brought. Ally Bank needed to pass its Community Reinvestment Act exam. If the suit had not been settled, it probably would not have passed the exam.

This bears a striking resemblance to a mob shakedown. Someone would come into a business and say, “You have a nice place here, it would be a shame if something bad happened to it.” Now the government is doing that. It gets worse.

The article concludes:

In fact, CFPB still has not been able to definitively ID the race of any borrower it claims Ally victimized — which is why it has taken more than two years to send remuneration checks to alleged victims. Desperate to find them, the bureau recently had to mail 420,000 letters to Ally borrowers to coax at least 235,000 into taking the money, and to allow Cordray (CFPB chief Richard Cordray) to save face.

Checks started going out this month to the fictitious victims — just in time for the election. So what if some recipients are white? They will all no doubt thank Democrats for the sudden, unexpected windfall of up to $520 in the mail.

When the government becomes a thug, it is time to shrink and replace the government. Who exactly was the Consumer Financial Protection Bureau set up to protect?

Removing Common Sense From The Small Business Loan Department

Yesterday Investor’s Business Daily posted an article about a new regulation on small business lending. Before leaving office, President Obama is attempting to recreate the mortgage bubble that led to the crash of 2008. This time the crash will be created in the area of commercial loans to small businesses.

The article reports:

The White House complains minority-owned firms don’t have the same access to credit as others. But the result of this new political scrutiny is easy to see: Commercial lenders will be pressured to lower standards, leading to riskier lending and higher defaults (see: mortgage bust, ’08).

The Consumer Financial Protection Bureau has carved out a new executive-level position: “assistant director of small-business lending markets,” which will lead an unprecedented collection of race-based data about loans to “minority-owned businesses.”

Meanwhile, CFPB Director of Fair Lending Patrice Ficklin said the bureau is starting its first fair-lending-focused exams of business lenders. Specifically, regulators will look at “small-business loan underwriting criteria” to see if it has a discriminatory “disparate impact” on minority business owners applying for credit. Marketplace lending will also be under the microscope.

The move is a result of a letter written by 84 House Democrats and 19 Senate Democrats (comprised mostly of Congressional Black Caucus members) to Consumer Financial Protection Bureau (CFPB) Director Cordray asking him to require all lending institutions to disclose the race of small-business owners who apply for loans and the outcome of loan applications. The supposed outcome of this is to remove ‘barriers to small-business creation.’ The actual outcome of this will be that risky loans will be required and banks and institutions that make small business loans will begin to lose money and threaten the economic health of the nation.

Massachusetts Senator Elizabeth Warren has asked Director Cordray to collect the data to make it easier to enforce fail lending laws. Again, we are going to be divided according to race rather than encouraged to work together.

Statistically African-American business owners are more likely to default on business loans. Banks and commercial lenders have to consider that when they make loans. This sort of interference with free market economics can only hurt the economy–not help it. I am against denying anyone a loan because of their race, but I am also against giving someone a loan because of their race. There can be some flexibility in granting these loans, but there also has to be some common sense in protecting the lenders and the people who finance the loans.

The article concludes:

Yet as with mortgages, the assumption is that underwriting standards are racist and must be made more flexible, risks be damned. Since business loans default at higher rates than mortgages, another government-sponsored financial crisis won’t be far behind.

Hold on to your hat.

More Rules For Thee But Not For Me

Breitbart.com reported yesterday that there are some questions as to the amount of money Elizabeth Warren spent to set up the “Consumer Financial Protection Bureau” as a federal watchdog to prevent financial institutions from abusing U.S. consumers.

The article reports:

The Office of Inspector General of the United States Federal Reserve (OIG) was requested by the House Financial Services Oversight and Investigations Committee on January 29, 2014, to evaluate the Consumer Financial Protection Bureau’s (CFPB) headquarters renovation costs that rose from $55 million to at least $215.8 million.

…According to a 2012 Independent Performance Audit, the legislation uniquely guaranteed the CFPB an automatic percentage of the Federal Reserve System’s operating expenses and that “funding is not subject to the traditional formulation and review of the Congressional appropriations process.” In addition, “Receipt of funds from the Federal Reserve authorizes the agency’s budget spending authority.”

The article explains why this spending is a problem for Ms. Warren:

The OIG found that the “Scope and Justification for Estimates” for the “$55 million and $95 million budget amounts for the renovation for fiscal year FY 2012 [beginning October 1, 20011] and FY 2013 [beginning October 1, 2012], respectively, were published in the CFPB’s public budget documents.” The OIG also found that “Approvals through decision memorandums were obtained for these amounts.” But the OIG reported that “CFPB was unable to locate any documentation of the decision to fully renovate the building.”

It therefore appears that although Sen. Elizabeth Warren was the responsible party at the CFPB who approved the “decision to renovate,” the design, and the cost “Scope and Justification for Estimates,” all documents regarding her decisions have vanished.

More missing paperwork from the Obama Administration. Someone needs to open a Lost and Found for these people. Ms. Warren was supposed to be protecting consumers from overzealous corporations, meanwhile she was exploiting the taxpayers to create her own luxurious offices. This sort of expense can be added to the list of places the federal budget could easily be cut.