Biden’s nomination to direct the Consumer Financial Protection Bureau (CFPB) has not yet been confirmed. However, the government agency is already transforming, guided by the up-to-date administration’s commitment to addressing disparate outcomes and social inequality.
The CFPB was created by the Dodd-Frank Act in the wake of the 2008 financial crisis and was intended to protect the American people from harmful or illegal business practices. The agency creates and enforces rules for financial institutions while maintaining a database of public complaints, which is often the basis for its investigations.
In recent interviewSenator Sherrod Brown (D-OH), chairman of the Banking Committee, spoke about changes to the CFPB, saying, “We have a White House completely committed to rooting out structural racism, and this agency will be an important part of that process.”
Immediately after the CFPB proposal by then-Harvard Law Professor Elizabeth Warren, Republicans came out against the agency relies on already existing regulatory bodies such as the Securities Exchange Commission and the Federal Deposit Insurance Corporation.
Republicans also worried that the agency was “the epitome of government overreach” and avoided congressional oversight by receiving funds directly from the Federal Reserve.
During his 2016 campaign, then-candidate Trump made the CFPB a common target of his arguments against government regulation. After his election, Trump continued his verbal attacks with physical actions.
Although Trump was unable to dismantle the agency outright, by appointing two up-to-date directors, noted CFPB critic Mick Mulvaney and then Ohio Republican Kathy Kraninger, he was able to drastically reduce agency budget and regulatory jurisdiction.
His original nomination of Mulvaney was challenged in court, but ultimately The Supreme Court upheld the ability of a sitting president to remove and replace the director of the CFPB. However, with Biden’s election victory, the SCOTUS decision means Biden will be able to instill up-to-date leadership and reshape the agency in his own image.
And according to the Biden administration guiding mantra address racial inequality and root out systemic racism, the CFPB is preparing to also exploit it as a tool to support left-wing policies.
According to NBC NewsThe Biden administration “has identified the agency as a key weapon in its arsenal to eliminate racial disparities in access to loans, capital and credit, part of the main campaign promises black Americans and other people of color.”
The agency’s interim director, Dave Uejio, has already begun to expand the agency’s reach by recruiting “mission-driven” lawyers willing to “achieve the agency’s mission priorities.”
He has also employed as senior advisor Diane Thompson, a CFPB advocate focusing more specifically on anti-discrimination measures and racial inequality.
President Biden’s nominee, Rohit Chopra, has not yet taken control of the CFPB, but the direction of the agency’s next steps is becoming clear. The CFPB is poised to become a motivated arm of the government aimed at combating perceived systematic racism by regulating, investigating and punishing American businesses.
What could go wrong?
