The new Consumer Financial Protection Bureau is both irrelevant and dangerous

An interesting contrarian point by Nicole Gelinas of City Journal.

Despite the good press, however, the CFPB—which will cost taxpayers almost half a billion dollars per year—is useless in some ways and deeply harmful in others. Some abuses that it was designed to curb have already been handled by existing federal agencies, while others are beyond its power to fix. The agency is equally incapable of remedying the worst ailment facing the American financial “consumer”: crushing debt, much of it purveyed by the federal government.

Yet at the same time, Congress has given the CFPB the formidable power of banning abusive, unfair, deceptive, or discriminatory financial practices relating to Americans’ everyday financial interactions. Though that may sound appealing, remember how the government, by trying to do essentially the same thing with mortgages, lured poorer people into financial contracts that they couldn’t afford. The CFPB may do for credit cards and other financial products what the government did for mortgages: make the poor think that borrowing lots of money is perfectly reasonable. The CFPB, in sum, is Washington’s new weapon in its war for more debt.


Well one can argue whether there is a need for a new CFPB. However, there is clear need for a regulator which helps people understand this financial products games. Even the pros do not understand basics and it is really difficult for consumers to undersatnd what game they are trapped into…

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