Guilty of Fraud

Buried within the 2,300 pages of Dodd-Frank is the creation of a new federal agency, the Consumer Financial Protection Bureau (CFPB).  This agency has taken responsibilities from other Federal agencies governed by the Congressional oversight we used to take for granted as democratic checks and balances and now exercises those powers without Congressional oversight.  The CFPB operates from within the independent Federal Reserve Bank with funding from the Fed but without supervision from them and also separate from House of Representative’s power to appropriate or not appropriate money. The CFPB has the power to define legally vague terms such as abuse and therefore attack a financial institution under its own seat of the pants rules. It has been accused of “ad hoc prosecution” by former White House counsel C. Boyden Gray.  It can create regulations and recently produced 804 pages for qualified mortgages and 753 pages for mortgage servicing. It has been acquiring checking account, credit card, etc. records from banks and others in a data mining effort similar to that of the National Security Agency.

The head of the CFPB is Richard Cordray, appointed by Obama as a recess appointment when the Senate was not in recess. The legality of this is presently working its way through the Federal Courts. The Consumer Financial Protection Bureau is the brainchild of Elizabeth Warren, who before becoming a senator from Massachusetts, set up the agency as a special adviser. She was appointed as special adviser so Obama could avoid a probably contentious Congressional approval process of her as director. Prior to this Ms. Warren had advanced her career as Harvard’s “first women of color”, a minority law teacher in the American Association of Law Schools directory and one of eight minority persons to win a certain award at the University of Pennsylvania. She even contributed to the 1984 “Pow Wow Chow” cookbook with allegedly Cherokee recipes which included one with the hardly traditional Cherokee ingredient of cognac.  Apparently this recipe was from a 1979 New York Times food column. She also listed herself, at times, as white despite her supposed 1/32 Cherokee blood. The Nazis’ used a 1/8 rule to decide who would live or die. The Federal government uses the 1/16 rule to determine who is entitled to various benefits for Native Americans. A 1/32 doesn’t mean anything.

However, genealogists have determined that Ms. Warren not only has no Cherokee blood, but that her specific 1/32 ancestor was married to a member of the Tennessee Militia that rounded up Cherokees and imprisoned them in a stockade as part of the infamous trail of tears. According to one Native American commentator Ms. Warren has not only never affiliated with any Native American organizations, but has rebuffed them including delegates to a Democrat National Convention.  When four Cherokee women traveled cross county to see her she accused them of being part of a right wing conspiracy. Another Native American writer said, “Elizabeth Warren has not just stolen an ethnic identity that does not belong to her, but she has also personally benefited from it and harmed the integrity of the American ethos…Americans cares about these things because America cares about integrity, honesty and fair treatment.”

Perhaps an agency with illegitimate powers, run by a fraudulently appointed director and designed by a fraudulent person is best suited to root out fraud from consumer financial products? Perhaps I don’t understand the wisdom by which Washington governs today?  Recently the Consumer Financial Protection Bureau has undertaken a massive study of bank fees and has also caused Capital One to refund $149 million to customers, Discover $200 million and American Express $85 million. Whatever the merits of these situations or the quality of the processes, the average person who has not looked deeper sees good stuff happening. Therein lays the danger of the CFPB. It is a Trojan horse to establish more regulatory agencies without, at least, the structural checks and balances of American democracy. As it is, today’s news is unrelenting in its stories of renegade existing agencies with supposed safeguards.

Copyright 2013, Mark L. Bennett