Republicans Don’t Want to Know What These Guys Are Up To
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Republicans Don’t Want to Know What These Guys Are Up To

Trump and Congress Target a Key Bank Monitor Set Up to Stop Another Financial Crisis

The Trump administration is moving to kill the Office of Financial Research, created after the financial crisis that began in 2007 to help prevent another economic meltdown.

The office, which analyzes and assesses risks in financial systems, is in the Treasury Department. It was created in 2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The House of Representatives recently passed the Financial Choice Act, which would abolish the office. That would weaken the government’s to conduct research and monitor financial markets. The office features a series of monitoring tools on its website: the Global Systemically  Important Bank Chart, Financial Market Monitor, Financial Stability Monitor and a U.S. Money Market Fund Monitor.

“This is a thinly veiled effort to gut consumer protection in the United States,” said Christopher Peterson, a former CFPB official. He called the move to eliminate the office and restructure the bureau “short-sighted” and “anti-intellectual.”

Trump’s proposed 2018 budget merely mentions restructuring the office. But some of its 214 employees are said to be looking for other work in the expectation that the agency will be radically shrunken in size or shut down.

Action Box / What you can do about it

Here’s who you can contact about the Financial Choice Act and restructuring of the Consumer Financial Protection Bureau.

The Financial Choice Act already passed the House of Representatives, so call your Senator and tell them what you think of the Financial Choice Act.

Contact the members of the Senate’s Banking, Housing and Urban Affairs Committee, where the bill is slated to head next, and tell them what you would like to see them do with the Financial Choice Act. 534 Dirksen Senate Office Building / Washington, D.C. 20510 / (202) 224-7391

Contact Jeb Hensarling, Chairman of the House Financial Services Committee and sponsor of the Act, and tell him what you think. 2129 Rayburn House Office Building  / Washington, DC 20515  / (202) 225-7502

You can also contact The White House, and let them know what you think about the restructuring of the Consumer Financial Protection Bureau and what you would like to see the President do about the Financial Choice Act. The White House /
1600 Pennsylvania Ave. NW / Washington, DC 20500; Comments: 202-456-1111 / Switchboard: 202-456-1414

William K. Black, associate economics and law professor at the University of Missouri-Kansas City, said that the target on the bureau and office’s back is a testament to how good they are at their jobs.

“The business communities in finance are desperate to prevent effective research,” Black said, later adding that the goal of these companies and legislation like this is to shut down regulation.

The bureau is championed by Sen. Elizabeth Warren (D-Mass.), who helped create it before her 2012 run for Congress.

Warren has defended the bureau and its service to consumers. “I’m going to fight my heart out to protect Wall Street reform & the @CFPB. I urge the Senate: Enough with the Wall Street handouts,” she tweeted on June 8.

The financial research office cost $96 million to run during 2016, about 0.000027% of the federal budget.

A shutdown would take away some of the financial monitoring tools that the office uses to protect consumers and inform Congress of the state of financial markets. Among its duties, the office analyzes the Federal Reserve’s annual stress tests to determine the financial health of large banks.

The Government Accountability Office, the investigative arm of Congress, has repeatedly criticized the office for not communicating more with other agencies. The GAO says that this lack of communication leads to repetitive financial monitoring and inefficient regulation.

That echoes the concerns of Todd Zywicki, a law professor at George Mason University, that the structure of the bureau and how its sub-agencies, like the office, are ineffective for regulation.

 

June 28, 2017