House Financial Services Committee Chairman Jeb Hensarling (R-Texas) criticized the CFPB as Director Richard Cordray appeared to give the agency’s semi-annual report before Congress last week, saying the agency is “the single most powerful and least accountable” federal agency in U.S. history.
Hensarling also said the agency was designed to operate outside of the traditional oversight applied towards other federal agencies.
“I also find it fascinating, as Syria has dominated our national consciousness, that it merely takes a majority vote of Congress to launch military action or to go to war, but it takes a super-majority vote of the Executive Branch Financial Stability Oversight Council to overturn a ruling of the CFPB, and then only if that ruling can be shown to threaten the safety and soundness of the entire U.S. financial system,” Hensarling said. “All of this does beg the question: who will protect consumers from the Consumer Financial Protection Bureau? True consumer protection requires access to competitive, transparent and innovative markets vigorously policed for force, fraud and deception. True consumer protection empowers consumers and respects their economic freedoms to make informed choices free from government interference and fiat.”
Hensarling said consumer protection is not “a zero-sum game” in which producers must lose if consumers win or lenders must lose for borrowers to win.
“Consumer protection is not having powerful government agencies ‘nudge’ consumers to make ‘correct’ choices in the belief they are incapable of making rational decisions for themselves,” Hensarling said.