Some are describing this an old-fashioned alley fight, as the GOP is hell-bent on minimizing the Consumer Financial Protection Bureau (C.F.P.B.). The White House announced this morning that Elizabeth Warren has been replaced by former Ohio Attorney General, Richard Cordray.
Dodd-Frank Financial Reform
The agency was adopted as part of the Dodd-Frank financial reform which was adopted in 2010. The agency's mandate is to provide consumer protection. As simple as that sounds, especially due to the millions of households which have been negatively impacted due to the 2007 financial crisis, you would think politicians regardless of party affiliation would welcome such protection.
Residents in Los Angeles are reeling from the glut of foreclosures and other personal financial collapses. Many blame Wall Street, mortgage lenders and other financial companies of not being properly regulated as part of their ignorance in agreeing to products they knew very little about.
Warren Would Not Give In
Warren is known for her consumer advocacy which was one reason she was selected. However, because of her watchdog perspective and not easily intimidated by those who disagree with her mandate, she became a lighting rod for the GOP led House of Representatives and those in the Senate.
In May, forty-four senators sent President Obama a letter indicating they would block Warren or anyone selected to serve as director. The importance of their dissent is since the position is an “part of the official cabinet,” it requires confirmation. Part of the GOP strategy is to dilute the agency's authority and block any policies it creates. It makes for great political theater but try telling that to the households who have been affected.
Understanding Politics and Strategy
Not to be deterred, the White House is moving ahead and realizes part of politics is the give and take, and eventually smarter heads will prevail so that consumers have more protection than they had prior to the financial crisis erupting.
Even though Cordray is replacing Warren, the battle if far from over. Ideology appears more important than practicality, so while Cordray may be more acceptable than Warren, the GOP simply doesn't believe the agency is needed. Part of their fear is the agency has too much power.
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