Federal Reserve historian slams Consumer Financial Protection Bureau

Allan Meltzer, author of a new exhaustive history of the Federal Reserve, slammed Congress's recently passed financial reform law for creating an “abomination” in the Consumer Financial Protection Bureau. During a panel discussion at the American Enterprise Institute with former Fed chairman Paul Volcker, Meltzer, who has been critical of federal intervention during the financial crisis, said that the Consumer Financial Protection Bureau was “absolutely not the way to go.”

“It should be on the budget if it's going to be a regulatory authority in the Federal Reserve,” he said, criticizing the way that CFPB would not be subject to the normal congressional appropriations process. Because the agency would be dealing with the distribution of wealth in this country, “Congress should have a much heavier hand.”

This reflects similar criticisms of the CFPB by Texas Republican Rep. Randy Neugebauer, who was just tapped to run the oversight and investigations subcommittee of House Financial Services. Neugebauer recently appeared before a conference of the Consumer Federation of America, which advocated for the agency, to offer his critique that the agency would need more oversight. From National Journal:

“The new Consumer Protection Financial Bureau, however well intentioned, creates another federal agency that is not only duplicative, but has the widest reach into the U.S. economy than any agency in Washington. On top of that, the CFPB’s operating budget is not subject to the appropriations process, so it is insulated from control by Congress,” he said.

He said the House Financial Services Committee under GOP control would carefully oversee implementation of the Dodd-Frank law. “We want to make sure what I believe is a far-reaching process doesn’t become more far reaching,” Neugebauer said to no applause.

Volcker offered no comment about the CFPB, but did note that the Federal Reserve hadn't regulated enough and that regulators do need to intervene when crises arise.

Beltway ConfidentialFederal ReserveTexasUS

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

Music venues around The City have largely been unable to reopen due to ongoing pandemic health orders. (Kevin N. Hume/S.F. Examiner)
SF to cut $2.5M in fees to help 300 nightlife venues

San Francisco will cut $2.5 million in fees for hundreds of entertainment… Continue reading

SF Board of Education vice president Gabriela Lopez and commissioner Alison Collins listen at a news conference condemning recent racist and social media attacks targeted at them and the two student representatives on Monday, Oct. 26, 2020. (Kevin N. Hume/S.F. Examiner)
Online attacks on school board members denounced by city officials

City officials on Monday condemned the targeting of school board members, both… Continue reading

President Donald Trump and Democratic presidential nominee Joe Biden have taken different approaches to transit and infrastructure funding. <ins>(Yuri Gripas/Abaca Press/TNS)</ins>
Bay Area transit has big hopes for a Biden administration

The best chance for local agencies to get relief may be a change in federal leadership

BART Ambassadors are being called on to assist riders in social situations that don’t require police force. <ins>(Kevin N. Hume/S.F. Examiner)</ins>
Unarmed BART ambassadors program formalized with a focus on community service

Public safety and police reform are key elements in campaigns of Board members Dufty and Simon

East Bay hills and Port of Oakland visible from Point San Bruno Park jetty. (Shutterstock)
East Bay agencies urge precautionary evacuations ahead of wind event

At least two East Bay jurisdictions suggested Sunday that residents in the… Continue reading

Most Read