I’m pretty gobsmacked by the link (hat tip reader Scott S) to a webpage at the Consumer Financial Protection Bureau which says it is written by Richard Cordray: “We want to make it easier for you to submit comments on streamlining regulations.”
There is more than a little bit of NewSpeak in this idea. “Streamlining regulations” is generally right wing code for “eliminating/relaxing regulations.” Admittedly, Elizabeth Warren during her brief time as de facto head of the nascent CFPB, proposed and launched a project to simplify mortgage disclosure forms to combine two required forms into one and make them easier to understand. Banks, needless to say, opposed the idea.
Warren has long believed that improved disclosure for retail products was a win-win for consumers and financial services firms. I saw her speak in March 2010 and she mentioned how a standard credit card agreement in 1980 fit on one piece of paper. Today, with all the various riders, they come in at 30 pages. While greater clarity is obviously beneficial to the borrower, it also saves the banks’ costs.
However, this opening of the door by Cordray does not look as likely to produce such happy outcomes. Maybe this is a means for the CFPB to force lobbyists to provide their input in a format that makes it easier for CFPB to process. But I can’t imagine the Cordray or Raj Date would say to the American Bankers Association: “We are trying to create a level playing field, so we won’t meet with you. Put it in writing and we’ll give it due consideration.”
So if this portal is a supplemental channel, who exactly is it intended to serve? The dropdown menu on the “Tell Us About Yourself” page tells us who it expects to comment: people from organizations, specifically:
Financial services provider
In other words, it does not contemplate that consumers have the expertise or motivation to provide input. Citizens are probably assumed to be represented via the CFPB itself or perhaps also by consumer groups, but even then, they may have specific axes to grind (think the AARP). I wonder how it would react to suggestions from an Occupy group, say an Occupy the CFPB that could match the caliber of work done by Occupy the SEC.
What troubles me about this anodyne-looking portal is that it looks like an invitation to members of the banking industry to declare war on existing regulations via the ruse of “streamlining.” Shouldn’t the CFPB be setting the agenda on what regulations it thinks are in the biggest need of review, and actively solicit input on them, rather than put itself in the position of needing to respond to whatever topics banks and lobbyists choose to make noise about?
The premise is that simplifying regulations is always a boon when that is not necessarily the case. When businesses started pushing for deregulation and simplification of regulations in the Carter Administration, there was no proof that regulations were hampering competitiveness. From ECONNED:
Indeed, the boosters of a new hands-off posture toward business were never able to prove a decline in innovation, much less that regulation was responsible. In fact, the supposed problem was (in a remarkable bout of candor) frequently characterized as a “perceived lag.” However, the science advisor to the White House, Dr. Frank Press, had been co-opted despite the lack of real evidence and backed the corporate agenda.
The logic used here was repeated again and again in subsequent pushes for deregulation: the superior wisdom of the self-regulating market and how other approaches compromised freedom; the redefinition of progress from social and collective benefits to the process of “innovation,” irrespective of whether the results actually were positive. Another disturbing thread in this new line of thinking was an assault on democracy as the enemy of efficiency, order, and rationality, and the invocation of the superior judgment of experts.
As these initial efforts bore fruit, the big businesses backing the deregulation effort became emboldened and made more demands. They began to characterize government action as “interference,” implying businesses had an absolute right to unfettered operation, and argued for lowered expectations on behalf of the public.56 If corporations did indeed become more prosperous thanks to newly-won freedom, it would have been reasonable for the gains to be shared, particularly since some of the changes sought (lowered pollution standards, less stringent product quality regulation) imposed costs on the public at large. But the corporations wanted to have their cake and eat it too: fewer restrictions on their activities, and less collective participation in the upside.
Perhaps this portal is meant to serve a benign purpose, such as to lower the cost to small banks and community groups to register their views with the CFPB. But it looks as if the agency is embracing priorities that favor the banking industry rather than the consumers that it is nominally designed to serve.