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President Trump has tapped Mick Mulvaney head of the Office of Management and Budget, to run the Consumer Financial Protection Bureau, a bad sign for a number of reasons. As we noted back in 2012 in Financial Crisis and Leviathan, the CFPB was created during the greatest financial crisis since the Great Depression, not a good time to expand government. The CFPB was based on the assumption that even educated and informed consumers were unable to look out for themselves, and duplicated the work of existing bank regulators.
The CFPB is funded by the Federal Reserve, which is obviously improper. The CFPB has no board to oversee its affairs and is not accountable to Congress. Presidential appointee Richard Cordray basically called all the shots. He sought to renovate the CFPB building with a four-story glass staircase, a two-story waterfall, and a sunken garden. Projected costs rose from $55 million to $95 million to $150 million to more than $215 million, an astounding $590 per square foot. By contrast, the Trump World Tower in New York came in at $334 per square foot and the Bellagio Hotel and Casino in Las Vegas at $330. The CFPB is wasteful, unaccountable and redundant, so taxpayers have a right to wonder what it is all about. Some clues have emerged.
Before he resigned last week, Cordray tapped staffer Leandra English to run the CFPB while Cordray, a Democrat, runs for governor of Ohio. So taxpayers could be forgiven for seeing the CFPB as a form of publicly funded preparation for this political move. The CFPB should be eliminated at the first opportunity but Congress can’t seem to get anything undone. If they can’t cut a federal agency as wasteful, unaccountable and redundant as the CFPB, all talk of “draining the swamp” should cease.