Biden Puts Regulators Back in Business
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Biden Puts Regulators Back in Business

Regulatory Renewal: After Four Years Covering for Big Business, Agencies Get Back to Protecting People

Philip Mattera

One of the biggest betrayals committed by Donald Trump was including a traditional Republican attack on regulation in a purportedly populist agenda.

Trump managed to get many of working-class followers to believe that weakening oversight of business was in their interest. It was actually a boon to the large corporations Trump pretended to challenge.

Some initial steps by President Joe Biden indicate that he is ending the charade and will return regulatory agencies to their intended missions, especially those helping working families. This intention can be seen both in nominations for new agency heads and early confrontations with some Trump holdovers.

Replacing key policymakers … will go a long way in reorienting the agencies back to their mission of protecting working families.

One confrontation took place at the Consumer Financial Protection Bureau (CFPB), which was created by the 2010 Dodd-Frank Act. The law incurred the wrath of business-friendly Congressional Republicans for its aggressive enforcement actions against financial sector abuses. Opposing politicians took special aim at the provisions in Dodd-Frank that gave the CFPB’s director a great deal of independence.

President Biden demanded Kathy Kraninger, CFPB, resign.

Kathy Kraninger, CFPB

The Trump administration worked hard to defang the CFPB. In 2017, it succeeded in putting the agency under the control of the Office of Management and Budget director, Mick Mulvaney, who was openly contemptuous of its mission.

In 2018, Trump named Kathy Kraninger, a Mulvaney crony with no experience in financial regulation, as agency head. After being confirmed on a party-line vote, Kraninger went on to weaken the CFPB’s rules against predatory lending and to reduce enforcement activity against large banks.

Immediately upon taking office, President Biden demanded Kraninger’s resignation. Biden was able to take that action because opponents of the agency’s independence had prevailed in a Supreme Court decision. The new administration turned the tables, using the ruling to facilitate reinvigoration of the agency.

While Kraninger agreed to resign, Peter Robb did not. The powerful general counsel of the National Labor Relations Board (NLRB) was sacked. He was anti-union back to his involvement with the Reagan administration’s attack on the air traffic controller’s union.

Robb spent the past three years doing his best to thwart the NLRB mission of promoting collective bargaining. He even tried to limit worker free speech by asking a federal court to bar the use of large inflatable rats on picket lines.

Peter Robb, NLRB

The Biden administration apparently decided it was worth alienating Republicans to stop the damage Robb has been inflicting on labor rights by firing him 10 months before his term expired.

Replacing these key policymakers at the CFPB and the NLRB go a long way in reorienting the agencies back to their mission of protecting working families from the predatory practices of the financial services industry and the abusive practices of employers. They fit together with the overall change of direction signaled in the executive order President Biden issued on his first day,  reversing Trump’s deregulatory framework.

Let us hope these personnel and broad policy moves will be just the first steps in an extended campaign by the Biden administration to end demonization of regulation and to use the powers of the federal government to promote economic justice.

 

January 25, 2021