… is from page 539 of Thomas Durkin, Gregory Elliehausen, Michael Staten, and (my GMU colleague from over in the law school) Todd Zywicki’s excellent and exhaustive 2014 study, Consumer Credit and the American Economy:
[T]he CFPB [Consumer Financial Protection Bureau] thus combines broad, vaguely defined powers with a complete absence of effective oversight by any other branch of government, even including Congress in the absence of new governing legislation. The president can appoint, but cannot remove the Director, Congress cannot affect the CFPB’s budget, the CFPB is headed by a single Director and thus lacks the internal checks and balances of a commission structure, and neither the Federal Reserve nor any other regulatory body has any authority to override the acts of the CFPB. Finally, although the CFPB is required to do its own cost-benefit analysis of proposed regulations, it is insulated from review by the Office of Information and Regulatory Affairs and the Office of Management and Budget. Consequently, it is immune from the standard cost-benefit analysis applied to other executive departments. In short, the CFPB is arguably the combination of the most powerful and least accountable regulatory agency in American history.
DBx: In short, this U.S. government agency – which is Elizabeth Warren’s baby – is almost completely unregulated.
Why is it that those, such as Sen. Warren, who scream so loudly for regulation want as little possible regulation of government? In private markets, regulation is interwoven into the very fabric of those private arrangements and processes: each consumer has the freedom to decrease the spending of his or her own money here and to increase his or her spending there, all without ever having first to win the approval of other consumers; each supplier (including each worker) has the freedom not to supply his or her wares and services here and to instead supply them there; businesses are free and encouraged by market signals to expand and contract as the voluntary choices of consumers direct; entrepreneurs are free and encouraged by market signals to seek out and to seize new profit opportunities. This competitive process, while never perfect, imposes regulation on all market participants that is about as reliable, as strict, and as apolitical as can be practically achieved.
And yet people such as Sen. Warren and most of her colleagues on Capitol Hill are blind to the strict regulation supplied by market processes and demand that it be overridden by unregulated government officials. The result is not better or more regulation; it is not even different regulation. The result is less regulation. Endowed with the monopoly power to dictate to others what others should do with their – the others’ – own money and resources, government officials exercise the very essence of unregulated (and, hence, dangerous) power. Be assured that this power will be used, not to promote the general welfare, but to promote the interests of the politically influential at the expense of the masses.