Less than two weeks from taking over the Oval Office, Donald Trump and his administration vowed to cut the vast majority of business regulations – a measure that would likely lead to the demise of the Consumer Financial Protection Bureau (CFPB), the watchdog agency designed to protect U.S. consumers from the kinds of predatory lending practices that precipitated the 2008 financial crisis and housing crisis.
The CFPB was designed by consumer advocates to be an autonomous agency, free from the grip of special interests that often influence Congress. Because it is funded by the Federal Reserve, the bureau does not report to elected officials. This structure allows it to curb abuses in the payday loan, student loan, auto loan, and other industries that go after middle-class and low-income borrowers with deceptive policies and practices.
Republican Senators Ben Sasse of Nebraska and Mike Lee of Utah have led a recent push to replace CFPB director Richard Cordray with a multi-member panel that can be controlled by Congress, Fortune reported.
“Director Cordray has vigorously supported the unconstitutional independence of the CFPB, “Sen. Lee said in a joint letter to Trump titled “Fire Cordray” with Sen. Sasse. “Considering the damage CFPB has done to credit unions and community banks, President Trump should act quickly to remove the director.”
The senators did not address the benefits that the American public has received from the CFPB since its inception in 2011. Since that time, the bureau has returned nearly $12 billion to some 29 million consumers – roughly 10 percent of the U.S. population.
On Monday, Trump signed another radical executive order taking aim at U.S. regulations. Although all the details of the order are not known, it mandates that two regulations must be revoked whenever a new regulation is passed. The Trump administration hopes to slash U.S. business regulations by as much as 75 percent. The White House sets a regulatory budget each year. This year’s budget has been set at $0.