Consumer Watchdog on a Shorter Leash

Chicago Tribune
July 19, 2011
Puzzanghera, Jim

As a result of political gridlock and partisan battles, the Consumer Financial Protection Bureau (CFPB) will launch on July 21 without an appointed director, meaning it will not be quite as aggressive as promised. Absent a director, the agency will not be able to crack down on mortgage brokers, nor will it have authority over payday lenders and remittance companies. President Barack Obama has nominated former Ohio Attorney General Richard Cordray to head the agency, but Republicans say they will oppose any nominee until key changes are made in the planned structure of the agency. The leaderless agency initially will be denied broad authority to prohibit "unfair, deceptive or abusive acts or practices" or to issue rules requiring better disclosures of the terms of financial products. However, the bureau will immediately take over the authority to enforce 18 existing consumer protection laws. Nearly every Republican in Congress and banks across the nation opposed the creation of the CFPB, arguing it would restrict access to credit. Meanwhile, the idea was quickly embraced by Obama and consumer advocates. The bureau likely will be able to run for a short time without an appointed director, but that will slow it from addressing long-standing problems, according to Travis Plunkett, legislative director for the Consumer Federation of America.
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