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Consumer Financial Protection Bureau ….Fail

President Obama acting like a neglected child pushed the edge of the legal envelope by appointing Richard Cordray as director of the Consumer Financial Protection Bureau last week.

 It was a presidential “recess appointment,” which is not new, by any means, since many other presidents have made recess appointments of their own.

 What makes this one different, and legally questionable, is that Congress was not actually on recess. But since the Attorney General (Eric Holder) is an Obama appointee and totally inept, I’m sure the appointment had his blessing before the announcement.

 One might also question the timing of this appointment as the Republican primaries were under way and president Obama was getting virtually no television coverage.

 The Congressional approval of Richard Cordray was being held up by the Republicans in the Senate, and rightfully so.

 Many of the rules and functions of the new agency could not proceed until a director was in place which was requirement of the Frank-Dodd legislation which actually created the new agency.

 When the Consumer Financial Protection Bureau was set up by Elizabeth Warren (another Obama appointee), it was assumed that she would be its first head. When she said no way hose’, it fell to Obama to select someone else, which was Richard Cordray.

 The republicans were blocking the confirmation of Richard Cordray, keeping much of the agency rules from going into effect. They did so because they felt the agency would have far too little accountability to Congress, which opinion this writer shares.

 This new agency will be run and funded by the FED (Federal Reserve). Since the Fed is not directly accountable to Congress, the new agency will not be accountable either.

 Allowing the FED to run a Consumer Protection Bureau as well as the money supply sets a dangerous precedent. By controlling not only the medium of financial transactions, but the transactions themselves, it gives the bureau enormous power.

 It would also extend the FED’s reach from large banks, to almost any financial entity by placing them under the label of ‘non-banks.’

 It would be much like a farmer controlling not only the crop grown, but also where and how it was sold. Creating rules regulating the stores in which the product was sold and to whom it was sold.

 It’s a dangerous overreach of powers bestowed to an agency overseen by another independent agency of the government with too little accountability to elected officials.

 This new agency will have virtually unlimited access to the financial records of any business and individual. Ms. Elizabeth Warren saw to that; one of the first things she put into place was information sharing agreements between states and federal agencies regarding financial transactions as well as complete access to all Credit Bureau information.

 More of our privacy being eroded under the guise of regulation for our own good is what this means.

 “The bureau already has initiatives in place that suggest it will remain focused on improving disclosure for mortgages, credit cards and student loans — the major sources of credit for most Americans, said Reid Cramer, director of the asset- building program at the New America Foundation. ”

So what are the first targets of this new behemoth of overregulation?

 1. Improving disclosure for mortgages

2. Credit Card disclosures

3. Student loans

 Well, let’s see how we are doing so far. The mortgage collapse came about because the Government was backing loans make by lenders to people that could not afford to pay back the loans if the economy faltered the least little bit.

 Didn’t they already control Freddie and Fannie?

 So the disclosure rules which were good enough for Fannie and Freddie are no longer good enough, so another layer of regulation has to be placed over the existing ones?

 Oh, the reforms passed by this administration in 2009 didn’t work? Well maybe “the third times a charm.”

 Credit Card disclosures: Currently the credit card statements have print so large on they you can read them 20 feet away. Oh, and the small side effect of this was the interest rates when up about 4 points on even the best of card holders.

 And many people who could get credit cards previously can’t get them now; maybe that’s a good thing. Of course the current requirements will certainly face a court challenge once the race card or the abuse of the poor card is played.

 I guess the credit card legislation that was also passed in 2009 by this administration didn’t work either? Maybe “the third times a charm” will work for this one too. 

Student loans: The government took control of all student loans with the passage of ObamaCare.

So they are going to re-regulate what they already regulate? Apparently so!

Ironically, guess where the most public debt load resides, and the most likely never to be repaid?

According to this article

 “They are worried about the amount of student loans that are out there and the ability of those students to repay them,” says Mark Greene, CEO of FICO….”

 “Other problem areas listed in the survey include credit card debt and mortgage debt.” 

This bureau will be yet another dismal failure of government intervention into free markets. It will be a third layer of regulation covering the same practices.

It will only result in yet another government bailout for those who deserve it the least.

Think this is not a dangerous overreach of government control? Look at the parallels in this article

“The Department of Consumer Protection at the Ministry of Economy has initiated strict measures to prevent traders from increasing the price of consumer products.” 

Now notice where the article is from.

Makes you wonder where this president is leading this country to.

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