BLOG VIEW: Any hesitation and skepticism that I may have carried in regard to Elizabeth Warren and the Consumer Financial Protection Bureau (CFPB) has been replaced with a full-blown case of acute apprehension. Last month in this column, I expressed concern about Warren's knack for rewriting recent history to suit the CFPB's agenda. Today, I am openly calling her to task for highly questionable comments that have no place in a mature conversation on housing finance policy.
Last week, Warren posted a commentary on the CFPB website that said the bureau's implementation team was holding a roundtable at the White House with ‘key leaders from the religious community.’ On its own terms, there is nothing wrong with such a meeting. After all, many faith-based organizations have found themselves with significant real-estate-related problems. For example, the Atlanta Journal-Constitution recently reported that 33 of the 113 churches listed for sale in metro Atlanta are either in foreclosure or in serious financial difficulty
Unfortunately, Warren was not interested in using the CFPB website to offer a solution to the real estate problems impacting the faith-based community. Instead, she used it as a platform to launch yet another inane attack on mortgage bankers while offering self-congratulatory accolades for the still-nascent CFPB.
‘The crisis revealed how the financial system permitted lenders to hide the true costs and risks of mortgages and to steer those who trusted them into products they did not understand,’ Warren wrote. ‘While some people profited from this business model, across the country, millions more suffered through foreclosures, crippling debt or bankruptcy. Personal gain for a few came at the expense of all, as risky and complicated mortgage products brought the entire economy to its knees.’
Oh, please, give me a break! I cannot believe that anyone is still peddling the nonsense about the nasty old lenders duping the poor borrowers into signing documents they allegedly could not comprehend. As usual, Warren ignores well-documented history and fails to acknowledge the years of disastrous federal policy that artificially engineered the ballooning of the housing markets, not to mention the incompetence of the regulators, bureaucrats and elected officials who totally failed to do their jobs in the years leading up to the September 2008 economic debacle.
‘The system also permitted some borrowers to take risks that not only hurt themselves, but also hurt their neighbors by driving the value of property higher and then pushing it off a cliff when those borrowers defaulted on their loans,’ Warren added.
The system permitted some borrowers to take risks? That reminds me of the classic quip made by comedian Flip Wilson when he was confronted by the disastrous results of reckless behavior: ‘The devil made me do it!’ Is Warren ever going to put the blame on the borrowers who went too far out on the proverbial limb by signing for loans that they would never be able to pay back? Or is the private sector the 21st century equivalent of the Garden of Eden's serpent?
Perhaps the prospect of an audience full of clergy members encouraged Warren to go to a truly bizarre extreme with this comment: ‘Enacting the new CFPB was a David-versus-Goliath fight, but in the end, American families triumphed.’
Anyone who was following the run-up to the CFPB's creation via the Dodd-Frank Act may be surprised to learn that this was a modern-day rerun of David and Goliath, especially when you consider the bullying and grandstanding by the Democratic majorities in the House and Senate in the months leading to the creation of the 2,300-page legislation. If you remember the serious elements that the Democrats insisted on keeping out of the Dodd-Frank Act (i.e., reforming the government-sponsored enterprises, creating the foundation for a covered-bond market, providing congressional oversight of the CFPB), it is difficult to determine who is supposed to be David and who is Goliath.
But if we are going to throw around Biblical comparisons, perhaps it would make sense to compare Warren's CFPB to the Golden Calf, the infamous manmade creation that became the object of exaggerated worship by a beleaguered and desperate population – with appropriately dismal results. The CFPB is not the answer to anyone's prayer, except maybe a small cadre of bureaucrats who believe bigger government is the same as better government.
However, the real cherry on Warren's cake is this over-the-top statement: ‘By requiring increased transparency, the new consumer bureau can add both to the economic security of American families and to the overall strength of our economy.’
The CFPB has yet to formally open, but it is already raising criticism for its lack of transparency. An exasperated Rep. Randy Neugebauer, R-Texas, chairman of the Oversight and Investigations Subcommittee of the House Financial Services Committee, is proposing to move the CFPB into the U.S. Department of the Treasury so it can be the subject of congressional oversight.
If Warren wants to mix religion into her efforts to puff up her work, I might recommend that she revisit the wise words of St. Thomas Aquinas: ‘Inordinate self-love is the cause of every sin.’
– Phil Hall, editor, Secondary Marketing Executive
(Please address all comments regarding this opinion column to hallp@sme-online.com.)
