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'What the heck do you think the CFPB was set up for?': Comments of the week

By Victoria Finkle
March 7, 2019 10:00 PM

Readers consider Square's bid to become an industrial loan company, weigh the Federal Deposit Insurance Corp.'s oversight of brokered deposits and debate reforms to the Consumer Financial Protection Bureau.

Square's point-of-sale device.
On an argument that allowing Square to become an industrial loan company would give it access to a big regulatory loophole:

"Industrial banks are real banks regulated by FDIC and state regulators and subject to the same requirements as other banks including Reg O and Sections 23A and 23B. For the past 35 years they have consistently been among the best capitalized and most profitable banks in the nation mostly because they operate without branches and have more support from parent companies."

Related: Square's ILC bid is a regulatory end run
fdic.jpeg
A man films the exterior of the Federal Deposit Insurance Corp. headquarters in Washington, D.C., U.S., on Tuesday, Sept. 29, 2009. The FDIC, seeking to replenish deposit reserves as banks fail at the fastest pace in 17 years, today voted to unanimously to have lenders prepay fees through 2012 raising about $45 billion. Photographer: Andrew Harrer/Bloomberg
On a legal memo published by the American Bankers Association warning that the Federal Deposit Insurance Corp.'s brokered deposit restrictions are too stringent:

"As someone who navigated the FDIC's brokered deposit review process, it's clear the FDIC lacks a standard approach and relies on advisory opinions and FAQs to create barriers for banks. Coupled with the notion from the 1980s that brokered deposits are inherently bad, regardless of your bank's operations, the FDIC wasn't exactly an eager participant in their review process."

Related: FDIC crackdown on brokered deposits goes too far: ABA report
bitcoin.jpeg
A pile of golden coins - bitcoin cryptocurrency, realistic 3d illustration
On a report that cryptocurrency firms are having trouble finding bank partners:

"Boo hoo hoo. Go cry me a river. And if the banks did allow cleptocurrency companies to bank with them and they lost money the media and lawyers would be all over the bank saying you shouldn't have banked those customers they were way too risky."

Related: Crypto companies complain they're being shunned by most banks
Acting CFPB Director Mick Mulvaney
Mick Mulvaney, acting director of the Consumer Financial Protection Bureau (CFPB), speaks during a Senate Banking, Housing & Urban Affairs Committee hearing in Washington, D.C., U.S., on Thursday, April 12, 2018. Senator Elizabeth Warren clashed with Mulvaney, accusing the former GOP congressman of putting politics ahead of protecting consumers. Photographer: Toya Sarno Jordan/Bloomberg
On House Democrats backing a new bill to undo many of the changes enacted under former acting Consumer Financial Protection Bureau Director Mick Mulvaney:

"The CFPB is an unconstitutional creation set up as the vanity project of Elizabeth Warren. Consumers had plenty of protection before the CFPB was invented, and they'd have even more if they simply 1) read the documents that they sign and 2) pay their obligations as agreed."

Related: House Democrats target CFPB politicos, other Mulvaney changes in new bill
CFPB headquarters
Exterior of the Consumer Financial Protection Bureau, Washington, DC USA
Another reader weighs in on Democrats' new bill to reverse some of Mulvaney's key decisions at the CFPB:

"I'm with her. What the heck do you think the CFPB was set up for? This utter idiot Mulvaney has taken away just about any protection there was. Why would you even think there should be some kind of compromise. It worked pretty much perfectly and the millions collected from the abusers of CITIZENS was a beautiful thing. Exactly why this administration stepped in to change it."

Related: House Democrats target CFPB politicos, other Mulvaney changes in new bill
Kathy Kraninger
Kathy Kraninger, director of the Consumer Financial Protection Bureau (CFPB) nominee for U.S. President Donald Trump, listens during a Senate Banking Committee confirmation hearing in Washington, D.C., U.S., on Thursday, July 19, 2018. Kraninger, a little-known official who has worked for the White House's Office of Management and Budget (OMB) since March 2017, is poised to succeed her boss Mick Mulvaney as director of the CFPB. Photographer: Andrew Harrer/Bloomberg
On an argument that the CFPB should revise how it tabulates consumer complaints, including for the debt collection industry:

"Debt collection can and should be improved. The CFPB in the prior administration was sloppy in defining its complaint database, effectively turning it into a government sponsored social media platform (we have all seen how balanced and objective social media is right?). Perhaps that was intentional, a means of helping to justify and magnify its mission. Complaint data collection with appropriate filters and protections for both the accuser and the accused is a valid concept."

Related: Dear CFPB: Revamp your complaint database
loans.jpeg
loan application in business folder showing financial investment concept
Another reader responds to an argument that consumer bureau unfairly tabulates complaints against debt collectors:

"Perhaps you are confused, it's 'consumer protection' not 'debt collector protection.' Lending is not a level playing field — not even moderately level. The real tragedy is the CFPB is afraid to tackle usury laws and how lenders continually skirt around them. The current system is legalized loan sharking."

Related: Dear CFPB: Revamp your complaint database
Victoria Finkle
BankThink Editor , American Banker
ILCs Debt collection Financial regulations Mick Mulvaney CFPB FDIC Square Cryptocurrency
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