The Challenge Elizabeth Faces Fourteenth banker
Dodd-Frank establishes that the purpose of the Bureau is to implement and enforce Federal consumer financial law to ensure that markets for consumer financial products are fair, transparent, and competitive. Which raises the question, if all it is to do is enforce existing law, what has been going on all this time? Dilorenzo addresses that in great depth. A lot of the problem is that the enforcement of the existing law was not a priority of the various regulators that are currently extant. Consumer protections were always secondary. In many cases, consumer protection was viewed as being in conflict with the primary legislative purposes. Two of those legislative purposes have been to keep financial institutions safe and sound and to make home ownership cheap and easy. To accomplish these purposes, a regulator may have determined that banks should have nice fat profits and that credit should be liberal and easily obtained. Well, for a long time the regulators accomplished both of those purposes. However, it was at great expense. Dilorenzo identifies in his paper what some of that expense was. It can be summed up as lasting harm to vulnerable populations who have had their wealth and credit ravaged, predatory profits by many unscrupulous lenders, and of course the damage to financial institution safety and soundness that required the bailout of the entire system, at great taxpayer expense. Then you can add to those the large numbers of unemployed and the damage to general business conditions and the security of all citizens.
So that should be easy to fix, no?