A New Face

The Washington Times reported on Thursday that Kathy Kraninger has been confirmed as the Director of the Consumer Financial Protection Bureau (CFPB) and will serve for the next five years.

The article concludes:

Meanwhile the CFPB is still facing major legal hurdles.

Some federal judges have ruled that by placing so much power — including an independent budget that Congress doesn’t control — in a single director, the CFPB violates the Constitution. But a ruling earlier this year by the full U.S. Circuit Court of Appeals for the District of Columbia upheld the singe-director structure.

Let’s take a look at the inception of the CFPB. The CFPB is the brainchild of Massachusetts Senator Elizabeth Warren. It was passed as part of the Dodd-Frank Act. The Dodd-Frank Act was Congress’ way of dealing with the housing bubble that caused the recession of 2008. However, the congressional solution was aimed at banks and Wall Street. It made no mention of the role that Congress had played in creating the housing crisis and made no effort to take responsibility for their actions or prevent a repeat of the problem.

In 1995 The Community Reinvestment Act (CRA) was changed, allowing Fannie Mae to purchase $2 billion of “My Community Mortgage” Loans, pilot vendors to customize affordable products for low and moderate income borrowers. Some of the things done to make the loans more affordable were low (or no) down payments and variable interest rates. Fannie Mae guarantees mortgages and then sells them to banks and investors. Banks were forced to issue sub-prime mortgages or pay large penalties. As more people took out mortgages, the price of houses rose quickly.  In 2005, 91 percent of Fannie Mae loans were variable rate loans. In 2004, 92 percent of Fannie Mae subprime loans were variable rate loans. Interest rates rose, gas prices increased, and people could not pay their mortgages. The subprime market collapsed, and foreclosures increased rapidly. Banks stopped making mortgage loans.

There were efforts made to stop this train. On September 11, 2003, The New York Times reported:

Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

…a new agency would be created within the Treasury Department to assume supervision  on Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The Democrats opposed the reform. Barney Frank, a Democrat from Massachusetts, said that it would mean less affordable housing. Melvin Watt, a Democrat from North Carolina, said that it would limit the ability of poor families to get affordable housing.

In 2005, John McCain warned of a coming mortgage collapse. He sponsored S.190 (109th), Federal Housing Enterprise Regulatory Reform Act of 2005. The Democrats blocked it. It was again brought up and blocked in 2007.

Opensecrets.org lists campaign contributions to politicians. Fannie Mae gave generously to insure that it would not be regulated. Some Democrats and Fannie Mae executives had ‘sweetheart’ loans from mortgage companies that were heavily involved in sub-prime mortgages.

So where am I going with this? The housing bubble was created by bad legislation. Bad legislation continues. In August 2016, The New York Post reported:

The Obama administration is doing its best to give the nation another mortgage meltdown.

As Paul Sperry recently noted in The Post, Team Obama has pushed mortgage lenders to offer home loans to folks with shaky credit, setting up conditions for another housing-market collapse.

Wasn’t the last one bad enough?

Credit scores of approved borrowers, for example, have been trending down, even as their debt levels have grown.

The Federal Housing Administration and government-sponsored “independent” lenders Fannie Mae and Freddie Mac have been demanding lower credit standards — just as the feds did starting under President Bill Clinton, in pursuit of the same “affordable housing” goal.

Some borrowers need only put 3 percent down to get a Fannie Mae loan — even if the downpayment is a gift. Fannie also has started up a new subprime lending program.

The Office of the Comptroller of the Currency recently warned that mortgage underwriting standards have slipped and now reflect “broad trends similar to those experienced from 2005 through 2007, before the most recent financial crisis.”

The Consumer Financial Protection Board (and Dodd-Frank) were not related to the cause of the 2008 recession–the recession was the result of bad laws. Both the CFPB and Dodd-Frank need to go away. They are nothing but a blatant example of government overreach.

Reining In An Out Of Control Government

Civil asset forfeiture has become a problem in America in recent years. I have written about a number of cases of forfeiture in recent years. Two of these stories are here and hereHot Air posted an article today citing what Florida has decided to do about this government abuse of power.

The article at Hot Air reports:

Some great news in asset forfeiture reform is coming out of Florida. S.B. 1044, approved by the legislature earlier in the month, was signed into law today by Gov. Rick Scott.

The big deal with this particular reform is that, in most cases, Florida police will actually have to arrest and charge a person with a crime before attempting to seize and keep their money and property under the state’s asset forfeiture laws. One of the major ways asset forfeiture gets abused is that it is frequently a “civil”, not criminal, process where police and prosecutors are able to take property without even charging somebody with a crime, let alone convicting them. This is how police are, for example, able to snatch cash from cars they’ve pulled over and claim they suspect the money was going to be used for drug trafficking without actually finding any drugs.

The civil asset forfeiture law was put into effect to allow municipalities to sell off the assets of criminals and use the money for municipal purposes. In order to trace drug money, a law was passed that any cash deposit of $10,000 or more had to be documented by the bank involved. This law was abused and used against small businesses that generally made cash deposits of less than $10,000. They were accused of making the small deposits to avoid the law, and their bank accounts were seized. A number of small businesses were forced out of business by these actions. Aside from the fact that that this is simply government overreach, it is also a violation of the Sixth Amendment.

Amendment VI

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.

Montana and New Mexico have already passed laws to curb the abuse of civil asset forfeiture laws. We need this trend to continue.

After They Are Done Destroying The Family, The Government Is Going To Destroy The Family Farm

Clint Farm tractor

Image via Wikipedia

I did not grow up on a farm. I am not sure I have ever been on one (other than school trips and a friend who has a barn and various animals). However, I am aware that the food in the grocery store comes from farms–many of them family-owned. The attack on the family farm through the estate tax is obvious–many family farms are land-rich, but do not have the liquid assets to pay off estate taxes–many of those families have to sell the family farm to pay the estate taxes. Now there is a new attack on the family farm and the culture and work ethic it represents.

Townhall.com reports that a new sweeping set of rules proposed by Hilda Solis, Secretary of Labor, will change the dynamic on the family farm.

The article reports the proposed changes:

  • Prohibit children under 16 who are being paid from operating most power-driven equipment, including tractors and combines. Some student-learners would be exempted from the ban on operating tractors and other farm implements, but only if the equipment has rollover protection and seat belts.
  • Bar those under 18 from working at grain elevators, silos, feedlots and livestock auctions and from transporting raw farm materials.
  • Prevent youths 15 and younger from cultivating, curing and harvesting tobacco to prevent exposure to green tobacco sickness, which is caused by exposure to wet tobacco plants.
  • Prohibit youths from using electronic devices such as cellphones while operating power-driven equipment.

Solis believes that some farm work is “too hazardous for children to be engaged in.”  How she knows this is anyone’s guess since she apparently has never lived or worked on a farm, nor do we find any evidence that she has children of her own. 

My experience is that the children who grow up on farms learn a lot of things other than how to drive a tractor. They learn to contribute to a family business. They learn the value and satisfaction of a job well done. They learn a work ethic. Many of the jobs this law would prohibit those under 18 from doing are the jobs those children do to earn money to go to college. Parents are the best judge of what equipment their children are able to operate–not the government.

 

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Things That Happen In Washington That Seem Unimportant At The Time

Spanish guitar (C.F.Martin)

Image via Wikipedia

The United States Department of Agriculture (USDA) website reports the following about the Lacey Act:

The Lacey Act combats trafficking in “illegal” wildlife, fish, and plants. The 2008 Farm Bill (the Food, Conservation, and Energy Act of 2008), effective May 22, 2008, amended the Lacey Act by expanding its protection to a broader range of plants and plant products. The Lacey Act now, among other things, makes it unlawful, beginning December 15, 2008, to import certain plants and plant products without an import declaration. This page will serve as a clearinghouse for all information related to the implementation of the Lacey Act declaration requirement and will be updated promptly as new information becomes available.

That sounds pretty harmless; however, it is not.

Today’s Wall Street Journal reports on some rather unexpected consequences of that amendment process.

The article reports:

Federal agents swooped in on Gibson Guitar Wednesday, raiding factories and offices in Memphis and Nashville, seizing several pallets of wood, electronic files and guitars. The Feds are keeping mum, but in a statement yesterday Gibson’s chairman and CEO, Henry Juszkiewicz, defended his company’s manufacturing policies, accusing the Justice Department of bullying the company. “The wood the government seized Wednesday is from a Forest Stewardship Council certified supplier,” he said, suggesting the Feds are using the aggressive enforcement of overly broad laws to make the company cry uncle.

Good grief. The long arm of the law has gotten totally out of control. The article further reports:

If you are the lucky owner of a 1920s Martin guitar, it may well be made, in part, of Brazilian rosewood. Cross an international border with an instrument made of that now-restricted wood, and you better have correct and complete documentation proving the age of the instrument. Otherwise, you could lose it to a zealous customs agent—not to mention face fines and prosecution.

At a time when the unemployment rate hovers around 9 percent, the federal government is hassling a guitar manufacturer and musicians with classic instruments. What a total waste of time.

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Who Is Protecting Endangered Americans ?

View On Black Bighorn sheep (Ovis canadensis) ...

Image via Wikipedia

Lincoln Brown posted an article at Townhall.com today about the impact of the lack of common sense in the Endangered Species Act.

Mr. Brown points out:

Despite the good faith efforts of wildlife officials in the State of Utah, members of the public, and even that evil moustache twirler known as the Energy Industry to improve Sage Grouse habitat, the bird may find itself listed as endangered in other states.

The unfortunate aspect of that is if it is listed as endangered in oh say Wyoming, it then becomes endangered everywhere, no matter what mitigation steps have been taken to upgrades its quality of life in Utah.

I had a conversation with one our county commissioners last week. As it turns out,. Sage Grouse and three obscure plants are just tip of the iceberg. I have been told that over the next few years, we can expect another 500 new species to become endangered over the next few years.

I am not in favor of putting animals at risk for extinction, but I would like to see some common sense in establishing what animals are endangered and exactly where they are endangered. Mr. Brown points out that in the western part of our country the Fur Fins and Feathers group routinely moves groups of animals around to balance animal populations. Bison, antelope and bighorn sheep are routinely located from areas that are overpopulated to areas the are underpopulated. It’s called common sense.

The danger in the lack of common sense in the Endangered Species Act is that the misuse of the act may prevent America from using natural resources that can be used without endangering any animals. We need to protect animals that are truly in danger, but we do not need to endanger Americans in the process.

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