There is No “Right Way” to Close the CFPB

By: Amanda Jackson

Let’s be clear, Hal Scott’s opinion piece in the Wall Street Journal calling for the shutdown of the Consumer Financial Protection Bureau (CFPB)—because the Fed has been running a deficit—isn’t just a bad policy recommendation; it’s an intentionally backward argument that advocates harming the very people the financial system has historically exploited.

The idea that we should dismantle the agency dedicated to standing up to big banks and loan sharks on behalf of predominantly Black, brown, and working-class consumers—because of an accounting technicality—is absurd. This critical regulatory agency has returned billions to consumers ripped off by payday lenders, shady debt collectors, and discriminatory mortgage practices. But that’s apparently too much accountability for the Wall Street types the WSJ is defending.

Truth be told, the CFPB was designed to be independent for good reason. Funded through the Federal Reserve and independent of political influence, its independence protects it from political manipulation that would undermine its effectiveness. The matter regarding the CFPB’s funding structure was settled just last year after the Supreme Court rejected a Republican-led effort with the same premise—a reminder that this issue has failed before the highest court. Claiming that temporary Fed losses render its existence suddenly unconstitutional is simply another excuse from those who never wanted it in the first place. And it’s part of an all out attack on  any agency that stands up for everyday people and challenges corporate greed.

This fight over an agency is actually about power—who gets protected in our financial system and who gets to run rampant when there is no regulatory oversight. Rolling back the Consumer Financial Protection Bureau would undermine protections for all, from the single-parent household being charged 400% interest on a payday loan to the Black family denied a fair mortgage rate to the college grad drowning in abusive student loan terms. Contrary to Hal Scott’s opinion in the WSJ, there is no “right way” to do the wrong thing.

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