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GOP sides with banks instead of consumers

It's their party, and they'll cry if they want to.

As expected, Republican senators blocked a vote Thursday on whether to approve President Barack Obama's nominee to head the new Consumer Financial Protection Bureau.

It's not that the GOP lawmakers have it out for former Ohio Attorney General Richard Cordray. They say they actually like the guy.

No, the Republicans insist they won't approve him — or anyone — until they get Democrats and the president to rewrite the law that created the watchdog agency. They want its leadership made weaker and thus more susceptible to industry lobbying. They also want more control over the agency's purse strings.

That's not how the GOP and its corporate compatriots put it, of course.

They say the changes would create greater transparency and accountability, even though the Consumer Financial Protection Bureau has been operational for only five months, hasn't announced a single enforcement action, hasn't issued a single regulatory mandate and hasn't had a director in all that time.

David Hirschmann, head of the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness, said Republican lawmakers "sent a clear message that changes are needed before a director is confirmed."

"Congress should focus on fixing this unaccountable agency, rather than on who should lead it," he said.

Wrong. If the GOP and its business buddies want more transparency, they should look to their own motives and admit that they're placing political expediency before consumer protection.

This isn't about making the Consumer Financial Protection Bureau more accountable. It's about holding the president's nominee hostage until Republicans can deliver a more business-friendly regulator to their deep-pocketed corporate backers.

The agency is charged with protecting consumers from rapacious credit card companies, mortgage lenders, payday loan firms and other businesses that aren't always known for their consumer-friendly ways.

Creation of the Consumer Financial Protection Bureau was fought every step of the way by banks and other financial services firms, which argued that a new industry overseer was unnecessary, despite the fact that unscrupulous lending practices drove the global economy to the brink of ruin and fostered the worst economic downturn since the Great Depression.

Elizabeth Warren, the Harvard law professor who came up with the idea for the bureau (and who was subsequently jettisoned by Obama as a sop to Republicans), told me this year that consumers have every right to impose a little tough love on banks.

"I don't think there's a question about what caused this crisis," she said. "It started with one lousy mortgage at a time, household by household. This started with people marketing lousy mortgages to Americans."

Bankers didn't like that kind of talk, and they made their displeasure plain in the form of political donations.

In the 2010 campaign cycle, individuals and political action committees associated with banks gave nearly $19 million to federal candidates, committees and parties, according to the Center for Responsive Politics. The vast majority of that money made its way to GOP recipients.

"It's no wonder there's so much cynicism about Washington these days," said Pamela Banks, senior counsel for Consumers Union. "Americans spent billions of dollars to bail out the big banks, and now the agency that was created to protect consumers from unfair financial practices is under attack by some lawmakers in Congress."

The big losers here are consumers — you and me — who overwhelmingly supported creation of an agency that would specifically address our needs.

A July poll sponsored by AARP, Americans for Financial Reform and the Center for Responsible Lending found that about 63 percent of Americans favored more government oversight of financial companies, and 74 percent favored having a single agency focus on protecting consumers from financial organizations.

Republican lawmakers clearly aren't representing the will of most Americans when they hamstring the Consumer Financial Protection Bureau. At best, they're reflecting the wishes of a minority of people, and most likely those people are pulling down seven-figure salaries at major financial institutions.

The conclusion is inescapable: Republican lawmakers, who are going into the 2012 election cycle as champions of rule-hating businesses and tax-disliking rich people, do not support consumer protection.

If they did, they'd be willing to give the Consumer Financial Protection Bureau — and its director — an opportunity to succeed, rather than attempting to cripple the agency with a weaker leadership structure and budgetary constraints.

GOP sides with banks instead of consumers 12/09/11 [Last modified: Friday, December 9, 2011 9:24pm]
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