The CFPB

I had a great Thanksgiving; there was no politics talk, just beer, wine, more beer, more wine, food, more food, more food, football, some kids running around including one kid who got totally naked in public (you gotta be free to be you, man) and eventually, sleep.

The NY Times arrived to today to remind me that the holiday is over, and I'm here to catch you up.

What will happen to the Consumer Financial Protection Bureau under Donald Trump?  The CFPB is a little-known but significant new body to emerge during the Obama years which fights debt collectors and other sleazebags.  The CFPB doesn't function perfectly, but, like a Band-Aid, it is arguably better than nothing.  It was established by the Dodd-Frank Act in 2010 and has been a thorn in the side of the debt-collection industry - an industry that, arguably, should not exist.

Let's say you run a business, and you advance a loan to a customer of one of your products, and that constumer never pays you back.  You have a right to go after that person, because they owe you.  How else are you supposed to keep your business running if people feel at liberty to not pay your bills?  You might need to hire a third party to go after the delinquent, since you have a business to run and don't have to track down folks who owe you.  I think even the biggest leftist in the world would be on board with the rights of the business, to this point, to collect the money that it has coming to it.

Now, however, say you have decided to write that debt off as part of the cost of doing business, period, and you decide to sell your debt to a third party - a debt collector - for them to collect for themselves.  In this instance, the customer who never paid for their goods remains morally in the wrong, sure, but what right does this third party have to collect any debt from anyone?  The original business decided the collection effort wasn't worth it.  The debt collection agency in this case is sort of like a pirate, going after booty rather than what they are properly due.  Much harder to root for such a party than for the original debt-issuing business.

Still, enforcement even at the hands of a third party can be a deterrent to customers incurring debt that they have no intention of paying back.  It's still "crime fighting" in a sense, so a moral case can be made for the existence and functioning of the debt collection industry.

But what happens when a debt collection agency decides to use deceit, harassment, or intimidation to collect debts?  What happens when the debt to be collected in the first place isn't even legitimate?  When it is a result of shoddy bookkeeping on the part of the originally issuing businesses and the debt collectors themselves?

I personally was in court against a debt collection agency.  I didn't understand the nature of the debt that I allegedly owed, as the opposing attorneys in the case couldn't produce one iota of evidence demonstrating that the debt was valid (I suspect someone may have obtained my old Sam Ash music store credit card, or perhaps I purchased something on that card and was never billed for it, or was billed at the wrong address).  I fought back, with the help of a lawyer friend, and won, but if I hadn't had a lawyer friend I wouldn't have been able to do that, and I would have ended up owing $2,000 for... what?  The debt collector couldn't even tell me what the debt was for.

Arguably, a debt collection agency should at least know, and be able to demonstrate, what the debt they're seeking to collect is for, when it was issued, and under what circumstances.

Debt collectors aren't the only rather borderline industry the CFPB has inconvenienced.  It has gone after the issuers of dodgy mortgages, too - you know, the subprime people. 

The financial industry has bellyached, as it is wont to do, about the CFPB, but, hey, guess what? They've lived:

After much grumbling — and many dire forecasts that the new rules would limit credit and harm consumers — mortgage lenders adjusted. They made nearly 3.7 million loans last year for home purchases, the highest number since 2007, according to government data.

“It seems like the financial services industry has figured out how to adapt to this new regulatory regime,” said David Reiss, a professor at Brooklyn Law School who studied the effects of the bureau’s rule-making. “We’ve moved from the fox-in-the-henhouse market in the early 2000s, where you could get away with nearly anything, to this new model, where someone is looking over your shoulder.”

I'd love to be able to drink openly on the job, but I don't complain that I'm not allowed to, you know?

I want to be objective, and it's always possible that the CFPB is actually strangling the financial industry and that the economy would be booming without it, but given the statements above, I'm inclined to think that claim is a bunch of malarkey.

It looks likely that the CFPB will not be abolished entirely, but rather, Hensarling'd:

But Donald J. Trump’s election revived calls from critics of the bureau to eliminate Mr. Cordray’s position and replace the agency’s leadership with a five-member, bipartisan commission. The critics say the move would temper the bureau’s more radical impulses; supporters say it would hamstring the agency and prevent it from doing virtually anything.

Representative Jeb Hensarling, Republican of Texas and the chairman of the House Financial Services Committee, introduced legislation in September along those lines, called the Financial Choice Act. If Congress wants to act immediately to curb the consumer bureau, that bill could become a blueprint.

That's finesse.

In other news, Donald Trump may be looking to scotch NASA's climate research, because it is "politicized."  (A lot of football experts tell me the Jets are not a very good team, but I think their opinion is politicized, honestly.)  This research costs $2 billion a year, a little bit more than twelve F-35 fighter jets.  I'll let you formulate your own opinion about that potential trade-off; watching the icecaps melt year after year is pretty depressing, so maybe the planes are a better bet.

Keep your eyes on the Office of Information and Regulatory Affairs if you want to watch the Trump administration put the kibosh on environmental regulation enforcement without actually changing the regulations themselves.

I could go on and on and on, but there's plenty of days to come, so for now let me just say Happy Thanksgiving to all of you, and even if you don't like those Peanuts animated movies, you gotta admit this song is pretty dope.