I don’t believe in the significance of Presidential speeches, and especially not in the kind of speech the president made yesterday which, despite a fair amount of hype and excitement about it from my friends on the left, broke basically no policy ground. But I did want to flag some brief remarks about financial misconduct and the Consumer Financial Protection Bureau:
Every day we go without a consumer watchdog is another day when a student, or a senior citizen, or a member of our Armed Forces – because they are very vulnerable to some of this stuff – could be tricked into a loan that they can’t afford – something that happens all the time. And the fact is that financial institutions have plenty of lobbyists looking out for their interests. Consumers deserve to have someone whose job it is to look out for them. And I intend to make sure they do. And I want you to hear me, Kansas: I will veto any effort to delay or defund or dismantle the new rules that we put in place.
We shouldn’t be weakening oversight and accountability. We should be strengthening oversight and accountability. I’ll give you another example. Too often, we’ve seen Wall Street firms violating major anti-fraud laws because the penalties are too weak and there’s no price for being a repeat offender. No more. I’ll be calling for legislation that makes those penalties count so that firms don’t see punishment for breaking the law as just the price of doing business.
What’s interesting about this, to me, is that the Dodd-Frank financial regulation overhaul is really the only example from Obama’s almost-three years in office where I think you could say he really bent Republican Senators to his will and broke a filibuster. In contrast to the legislative debates over stimulus, the debt ceiling, appropriations, or the health care bill Obama made it fairly clear that he was willing to settle for nothing and just stick with the regulatory status quo and the ability to complain about Republican obstruction. Since Obama was prepared to walk away, he wound up not needing to walk away and the New England Republicans came to the table with some compromise ideas. The inclusion of this point about Richard Cordray being held up in a basically campaign-y speech seems to indicate that we should expect a replay on the CFPB issue. The White House would presumably like to get their nominee confirmed and get this agency up and running, but if Republicans want to give this to them as a campaign issue instead they’re happy to take that.
A lot of people have questioned the administration’s commitment to the consumer protection issue over the years, but it’s precisely because the administration doesn’t regard consumer financial protection as the biggest deal in the world that they’ll hang tough and fight hard on it.