In a new column in American Banker, Sen. Katie Britt (R-Ala.) argues that some of the worst fears about the Consumer Financial Protection Bureau have come to pass: the politicization of regulations, wasteful and unnecessary spending, and a lack of accountability because Congress has no oversight mechanism.
“This is an often-overlooked agency led by a single director serving a five-year term, without a board of governors and without congressional input on how it spends hundreds of millions of public dollars to ‘protect consumers,” said Britt, who is a member of the Senate Banking Committee “This leaves virtually no system of checks and balances in place and a very limited ability to ensure the agency truly acts in the public’s interest.”
CFPB rulemakings have led to higher prices for everyday Americans and reduced availability of financial products and services, Britt said. As an example, she pointed to the CFPB’s actions against late fees for overdraft services — part of its campaign against so-called “junk fees.”
“For instance, banks of all sizes say that if the CFPB eliminates their ability to utilize late fees, in order to offset the risk this imposes, they would likely have to restrict credit to less creditworthy individuals, impose higher minimum balance requirements on account holders, and limit offerings of free or low-cost checking accounts,” Britt said.
When the CFPB was first proposed, former Alabama Sen. Richard Shelby warned about the “danger of an unaccountable consumer protection czar,” Britt said.
“Reflecting on the past decade-plus, it’s apparent that Sen. Shelby’s warnings about this powerful bureaucracy were not posturing,” she said. “They represented a legitimate concern that has only proven true over time — and in an accelerated fashion over the last few years under the current administration. It’s our Main Street communities, small businesses and hardworking families who are paying the price.”
