Personal Finance

In Jobs Speech, Obama Warns Republicans on CFPB

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The President’s jobs speech made headlines last week for its “fiery tone and impassioned delivery.” The New York Times’ David Brooks went so far as to call the speech, in which Obama outlined a $447 billion plan to stimulate job growth, “one of the most forceful and compelling domestic policy speeches of his presidency.”

So you can be forgiven if you missed the president’s not-so-veiled reference to the newly created Consumer Financial Protection Bureau, which recently opened its doors, though currently remains without a director. Why is the bureau headless? Well, Republican members of Congress want to see substantial changes to the way the agency is funded and run, and have vowed to block any nominee until they get their way. As a result, the nominee, former Ohio Attorney General Richard Cordray, despite being almost universally admired for his considerable track record, languishes in political purgatory. (Read our recent profile of Cordray to learn more about his background and the current impasse).

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Here’s what the president said:

“But what we can’t do—what I will not do—is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades. I reject the idea that we need to ask people to choose between their jobs and their safety.  I reject the argument that says for the economy to grow, we have to roll back protections that ban hidden fees by credit card companies, or rules that keep our kids from being exposed to mercury, or laws that prevent the health insurance industry from shortchanging patients.”

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Did you catch that? Protecting people from hidden credit card fees are covered in the 2008 CARD Act, but that and many other consumer protection rules will be enforced by the CFPB, and the President likens these to laws designed to protect us from mercury poisoning. It could be interpreted to mean that President has no plans to back down on the CFPB, or his selection of Cordray to run it.

This stalemate, however, goes well beyond traditional political jockeying. Until a director is installed, the CFPB will not be able to regulate non-bank entities like payday lenders, which also pose a risk to real consumers struggling to make ends meet.

Image: Official White House Photo by Chuck Kennedy

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