Enzi: Consumer Financial Protection Bureau needs more oversight
Date posted: August 26, 2013
SHERIDAN — U.S. Sen. Mike Enzi is warning Americans to be wary of the Consumer Financial Protection Bureau. He said the agency has unlimited ability to write financial regulations and unchecked access to every American’s bank accounts.
He also called the invasion of private records worse than the unethical surveillance of U.S. Citizens by the National Security Administration.
The CFPB was created in 2011 under the Dodd-Frank Wall Street Reform and Consumer Protection Act as part of an attempt to reform economic regulations after predatory lending practices contributed to inciting a deep economic recession in the late 2000s.
The stated purpose of the bureau is to regulate consumer protection for financial products and services, like credit cards, mortgages or even payday lenders.
“(It) sounds really good,” Enzi told The Sheridan Press in a recent interview. “If you have a credit card problem, they’re supposed to help you out. If you have a loan problem, they’re supposed to help you out.
The CFPB encourages Americans to submit their stories if they feel they’ve been the victim of predatory lending, unfair debt collection or other financial mistreatment.
While this agency claims to be the watchdogs for the country’s financial interests, Enzi said there’s no system of checks and balances.
“The difficulty is Congress has no control over them whatsoever,” Enzi said. “They get their money from the Federal Reserve before it comes to the government.”
Enzi added the CFPB does not have an inspector general to ensure the organization is operating ethically.
While the bureau is seemingly unaccountable to the government it serves, he said the organization has access to a wealth of details about every American citizen in the form of financial records.
“They get to look at your financial records — every one,” he said. “Now, it’s supposed to be anonymous. It’s not supposed to have your name on it, but that’s every gas purchase, ATM withdrawal, bank account, grocery store purchases — all of those things reported to the bureau. I think it’s worse than the NSA, and I think the NSA ought to be stopped, too.”
While the Senate, not all of Congress, appoints the president of the bureau, there is no required transparency of the agency. Enzi said the division was created with the primary stated purpose of regulating Wall Street, but the agency can collect macro and microeconomic data on all Americans. In addition to having free reign to write financial regulations, the bureau has the power to cancel a loan within 180 days, even if both parties to the loan are happy.
Enzi took the floor of the Senate July 16 and protested the lack of congressional oversight in the bureau by refusing to confirm the agency’s third new president since its inception. He cited objections to the fact that American citizens have no course of redress or way to “opt out” of having their data collected.
“Every other agency comes under our prevue. We may not be able to do anything about it, but we can at least call them in and ask them questions about it and make law changes for it,” Enzi said.
Enzi said the bureau’s funding is also not subject to the congressional appropriations process.
“They (the CFPB) get 10 percent of the Federal Reserve revenue,” Enzi said. “Nobody knows how much that is.”
Enzi said the government currently borrows money from the Federal Reserve at 1.86 percent interest, but some projections show that in five years, interest rates could reach 6 percent for the government and 9 percent for other individuals.
“When that happens, all we may be able to do is pay the interest on the debt,” he said.
Enzi said he would like to see more accountability not only within the CFPB, but also the Federal Reserve.
“One of the things I’d like to see is an audit of the Federal Reserve,” he said. “We haven’t had an audit of the federal reserve and we really don’t know how much we owe, how much money they’ve printed and that sort of thing. I think they owe that to us.”
“I have never been a conspiracy theory person, but as I see more of these things happening, I get worried about where we’re going.”
Enzi added that he does believe the country can be re-routed toward a more productive direction, but that it will take a large movement to enact real change.
“There’s always a point where the American public pays attention, turns around, and says ‘That’s not going to happen,’” he said. “I think we’re pretty close to it.”