On Febrary 7th, Presidential candidate and Texas Congressman Ron Paul wrote on the new Consumer Financial Protection Bureau (CFPB), and stated that this new agency will inevitably lead to greater financial harm to the American people. This new agency will not actually be controlled by Congress, nor the Executive Branch, but instead it will be housed and run by the banks and private Federal Reserve.
Proponents of the CFPB claim that this new bureaucracy will help consumers by protecting them from fraudulent activity. In reality, it will only expose consumers to more financial harm.
Housed within the unconstitutional Federal Reserve, and funded not through Congressional appropriations but through the Federal Reserve's interest revenue off the trillions of dollars of US government debt it holds, the structure of the CFPB ensures that it is run by unelected, unaccountable bureaucrats, with no effective oversight from Congress. Given broad power to regulate the activities not only of banks, but also of any other entity which the government deems offers a financial product, there is almost no limit to the scope of financial activities which the CFPB can oversee. – Ron Paul via The Daily Bell
The Federal Reserve was created in 1913 when Congress abrogated its Constitutional powers to print and control money, and gave them over to a private institution made up of national and international banks. In the creation of the CFPB, public protections of economic and banking systems are once again are being handed over to the very institutions that may be part of the growing financial fraud.
Derivatives, Collateral based securities (CDS, CDL), re-hypothication, and many other financial products and polices have all led to great financial harm and risk for investors, as seen recently in the MF Global scandal where commodity brokers used segregated investor deposits to bet on high risk bond purchases in Europe. In most instances, government agencies were unable or unprepared to protect the public from the fraud perpetrated by the financial and banking institutions.
In the end, Ron Paul is correct that the American people need to be worried about the CFPB, and the creation of a financial agency controlled by the Fed and banking industry to protect them from fraud and theft that was in fact, done by the very institutions who now have oversight. It is the epitome of the old saying that the fox is now guarding the henhouse.
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