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Crisis at the Consumer Financial Protection Bureau

Why Republicans hate the agency.

Confusion Over CFPB Leadership Succession After Mick Mulvaney Takes Over
Mick Mulvaney.
Alex Wong/Getty Images

The struggle over whether Mick Mulvaney or Leandra English is the person who is authorized under law to serve as acting director of the Consumer Financial Protection Bureau is an interesting and important battle in its own right.

But the real issue here, rather plainly, is whether the idea of creating a powerful consumer-focused bank regulator was a good idea at all.

Mulvaney, after all, is on record as saying that it isn't. Back when he was a House member, he called the agency a "sick, sad joke" and observed that while "some of us would like to get rid of it" altogether, that wasn't politically plausible. So instead, he would push for changes that were as close as possible to getting rid of it altogether.

Meanwhile, the CFPB has achieved a kind of iconic status in liberal circles. Its progenitor, Elizabeth Warren, is now a US senator. It was a key point of progressive advocacy during the Dodd-Frank legislative debate. It's become something former President Barack Obama's team embraced as a core part of their legacy. And the idea that banks are bad and protecting consumers is good seems so commonsensical that it's hard for some advocates to grasp just how offensive the CFPB's setup is to the conservative way of thinking.

That starts with the very premise of the agency. It's not out there protecting people from public health or environmental externalities. The idea of the CFPB is there might be a financial institution that wants to enter into a business relationship with you. And you might want to enter into a business relationship with it. But the CFPB might rule that you're making a bad decision and that it ought to overrule you and prevent it as a favor to you.

And then, because Warren is a true student of the administrative state (one admirer of hers who's active in Massachusetts politics told me Warren stands out in Congress because "she's read the literature"), the agency is full of unusual structural quirks. That starts with the fact that its staff is on the Federal Reserve pay scale so the bureau can recruit better people, and continues to the legislative provisions that Democrats are leaning on to try to stop Mulvaney from taking over.

It's a superpowered agency whose core mission seems to conservatives to be a huge case of regulatory overreach.

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