In recent weeks, there’s been considerable criticism from major news outlets over President Trump’s appointment of Mick Mulvaney as the new Director of the Consumer Financial Protection Bureau (CFPB). After all, as Congressman from South Carolina and later OMB Director, Mulvaney was a strong critic of the CFPB since the agency has acted without any oversight, accountability, checks, or balances.
The typical American consumer may have misgivings over what they perceive to be a weakening of the CFPB. After all, even the name sounds consumer friendly! Unfortunately, most Americans know little about the true actions of the CFPB and the damage the CFPB has caused to consumers and small businesses alike.
Since the inception of the CFPB, the agency has ruled through directives and judicial actions, interpreting existing laws, and making up new rules as they go along, in an effort to enforce the opinions of one man, the CFPB’s prior Director, Richard Cordray. All this has been accomplished hugely over-budget, with no regulatory or fiscal oversight from the President, Congress, the Judiciary, or the Office of Management and Budget. Richard Cordray has acted with total impunity, bordering on unconstitutionality.
The irony is that the consequences of these actions have NOT protected consumers! The current environment of “regulations run wild” has resulted in huge additional and unnecessary costs to financial service companies, lost jobs, and small financial service companies closing on a national scale.
Further results have been fewer options available to consumers, as companies have limited these options in an effort to protect themselves from possible litigation. Lending to consumers and small businesses has become more difficult and more expensive. Lower income borrowers have found it more difficult to obtain mortgages, as the costs to bring these to market now outweigh the revenue these loans will generate. Lastly, dozens of local banks nationwide have simply stopped lending mortgages, claiming it’s no longer profitable or worthwhile with ever increasing risks to the lender in this over-burdensome environment.
And don’t believe the CFPB’s claims that they have “recovered” millions of dollars from predatory banks. The bulk of these dollars are sitting in the coffers of the CFPB. Consumers have received mere pennies on these dollars.
The actions of the CFPB have harmed more than have helped consumers. To those in the know – and without any political agenda – it’s obvious that the CFPB requires a shakeup and restructuring. Instead of a CFPB with its current adversarial culture, a kinder and gentler CFPB can protect consumers while working with financial service companies large and small to attain this common goal.
Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, The Daily News, Anton Press, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.