{"id":1097,"date":"2011-12-15T08:17:30","date_gmt":"2011-12-15T13:17:30","guid":{"rendered":"http:\/\/www3.law.harvard.edu\/journals\/hlpr\/?p=1097"},"modified":"2015-10-02T15:25:45","modified_gmt":"2015-10-02T15:25:45","slug":"republicans-still-hoping-to-gut-financial-reform","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/lpr\/2011\/12\/15\/republicans-still-hoping-to-gut-financial-reform\/","title":{"rendered":"Republicans Still Hoping to Gut Financial Reform"},"content":{"rendered":"

Billy Corriher<\/span><\/em><\/p>\n

With the country still mired in a recession caused by the reckless decisions of big banks, Republicans in Congress continue to fight tooth and nail against stronger government oversight of the financial industry.\u00a0 Last week, Senate Republicans rejected the nomination of former Ohio Attorney General Richard Cordray to head the new Consumer Finance Protection\u00a0Bureau<\/a>\u00a0(CFPB), created by the Dodd-Frank financial reform legislation.\u00a0 Republicans did not feign doubts about Mr. Cordray\u2019s qualifications or suggest that he was the wrong person for the job.\u00a0 Instead, they pledged to reject any nominee to head the CFPB until the structure of the agency itself is changed.<\/p>\n

These Senate Republicans are apparently unhappy with the manner in which the previous Congress responded to public outrage about the financial crisis and the lax government oversight that enabled it.\u00a0 So they are using the Senate\u2019s arcane rules to thwart the democratic process.\u00a0 Congress established new rules to protect consumers from exploitation by financial institutions.\u00a0 The CFPB was intended to be independent from Congress, but Republicans seem determined to reign in the agency.<\/p>\n

Sen. Lindsey Graham\u00a0protested<\/a>\u00a0that the agency is funded by the Federal Reserve, removing any opportunity for Congress to influence the agency through the budgeting process.\u00a0 Graham warned that the CFPB is \u201csomething out of the Stalinist era.\u201d\u00a0 Given our government\u2019s recent history of failure in regulating the financial services industry, there is nothing communist about having this agency operate free from political influence.\u00a0 This type of rhetoric is ridiculous, and it will not satiate the public\u2019s continuing anger at Wall Street.<\/span><\/p>\n

Looking back on the roots of the financial crisis, Americans understand that the government should have seen it coming, given the enormous stake that big banks held in subprime mortgages.\u00a0 Instead, the government responded to the problem by throwing taxpayer money at the big banks.\u00a0 (A recent news\u00a0story<\/a>suggests the bailout was even bigger than we thought.)<\/p>\n

But hindsight is 20-20. The last Congress sought to protect consumers going forward.\u00a0 The \u201coversight\u201d agencies in place before Dodd-Frank seemed to be looking out for banks, not consumers.\u00a0 Now, Republicans seem intent on breaking the back of any agency dedicated to protecting consumers. Sen. Richard Shelby\u00a0argues<\/a>\u00a0that, \u201cCongress must assert its authority over the regulators it creates to hold them accountable for their failures.\u201d\u00a0 But Congress had authority over some of the regulators who sat on their hands before the financial crisis, and given the hyper-partisanship gripping Congress these days, the public will be well-served by an independent consumer protection agency.<\/p>\n

Obama should stand firm on Cordray\u2019s nomination.\u00a0 The director of the CFPB will have a tough job, and Cordray\u00a0seems<\/a>\u00a0eminently qualified.\u00a0 Last week, the agency\u00a0kicked off<\/a>\u00a0a pilot program to simplify credit card agreements.\u00a0 Until a director is installed, let\u2019s hope the CFPB continues to roll out common-sense reforms.\u00a0 President Obama has faced\u00a0criticism<\/a>\u00a0for failing to push for sufficient financial reforms, but if he sticks to his guns, he may find the American middle class rallying to his side.<\/p>\n","protected":false},"excerpt":{"rendered":"

Billy Corriher With the country still mired in a recession caused by the reckless decisions of big banks, Republicans in […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1097","post","type-post","status-publish","format-standard","hentry","category-blog"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/peZQka-hH","_links":{"self":[{"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/posts\/1097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/comments?post=1097"}],"version-history":[{"count":0,"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/posts\/1097\/revisions"}],"wp:attachment":[{"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/media?parent=1097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/categories?post=1097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/tags?post=1097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}