Sen. Ted Cruz (R-Texas) and Rep. John Ratcliffe (R-Texas) have introduced legislation to eliminate the Consumer Financial Protection Bureau (CFPB). In a news release announcing the legislation, Cruz called the bureau another example of the “cronyism that infects our nation’s capital.”
“Don’t let the name fool you, the Consumer Financial Protection Bureau does little to protect consumers. The agency continues to grow in power and magnitude without any accountability to Congress and the people. The only way to stop this runaway agency is by eliminating it altogether,” Cruz said.
Such a piece of legislation certainly is ambitious, given the fact that President Obama has made his support of the CFPB pretty clear. On the White House blog recognizing the five-year anniversary of the Dodd-Frank Act, it was cited that the CFPB has provided nearly $11 billion in relief for more than 26 million consumers.
It also was cited that $141 billion has been paid by 14 of the biggest banks for mortgage-related violations in the lead-up to the crisis, including $50 billion in gross consumer relief through the National Mortgage Servicing Settlement. Additionally, the post stated that “bank lending to businesses is up 30 percent” and that “businesses have created 12.8 million jobs over 64 consecutive months of private sector job growth, the longest streak on record.”
These figures make it difficult to argue against the Dodd-Frank Act and the CFPB.
When the Dodd-Frank Act was passed in the Senate in 2010, it passed with a 59-39 vote. When comparing the list of senators at the time the Dodd-Frank Act was passed to the list of senators now, since that time, 28 members who had voted for the bill have left the Senate. Sixteen members who voted against the bill since have been replaced.
This doesn’t matter much, however, because although the Dodd-Frank Act lost a lot of its “Yea” voters in the Senate, that doesn’t mean it hasn’t gained some serious allies: Sen. Elizabeth Warren (D-Mass.) helped create the CFPB and has been its strongest ally since. Warren also has a very large public following.
Gaining public support may be difficult for those looking to roll-back the Dodd-Frank Act and the CFPB. According to a report from the American Enterprise Institute, a nonpartisan public policy research institute: “All trends show a sharp drop in confidence in banks and financial institutions after the crisis in 2008. The trends updated most recently indicate a slight uptick in opinion since then, though confidence remains relatively weak. Republicans usually have slightly more confidence than Democrats or independents in Gallup’s trend, but they move in tandem.”
The report cited findings from the Pew Research Center, which asked people whether federal regulations within the financial sector had gone too far or not far enough, asking: “Thinking about financial regulation, which comes closer to your view? The government has gone too far regulating financial institutions and markets, making it harder for the economy to grow. Or, the government has not gone far enough in regulating financial institutions and markets, leaving the country at the risk of another financial crisis.”
In September 2013, respondents of this questions replied with 43 percent thinking the government had gone too far and 49 percent saying it didn’t go far enough. There wasn’t much of a change in January 2015, with 45 percent saying it went too far and 47 percent saying it didn’t go far enough.
The New York Times asked the same question in December 2014: “Do you think government regulation of financial institutions and markets put in place after the 2008 financial crisis has gone too far, making it hard for the economy to grow, or has it not gone far enough, leaving the country at risk of another financial crisis, or has government financial regulation been about right?”
In that study, 28 percent said that federal regulation had gone too far, 27 percent said the amount of regulation had “been about right” and 37 percent of respondents said that regulation had not gone far enough.