By Pam Martens and Russ Martens: June 14, 2017
The next leg of the insatiable Wall Street heist has begun under the new U.S. Treasury Secretary Steven Mnuchin. Under the guise of empowering Americans “to make independent financial decisions,” the Treasury released its set of recommendations for financial reform on Monday. Far from empowering Americans, the new recommendations would effectively place a bigger blindfold on consumers, blocking further their ability to differentiate between serially corrupt financial institutions on Wall Street and those that make an effort at playing by the rules. (The latter being an almost extinct species.)
Wall Street’s fingerprints are all over the Treasury recommendations. The report has singled out for particular scalpel treatment the Consumer Financial Protection Bureau (CFPB), which Wall Street loathes because of its independence. The acronym “CFPB” appears 315 times in the 147-page report. One passage reads as follows:
“A significant restructuring in the authority and execution of regulatory responsibilities by the CFPB is necessary. The CFPB was created to pursue an important mission, but its unaccountable structure and unduly broad regulatory powers have led to predictable regulatory abuses and excesses. The CFPB’s approach to rulemaking and enforcement has hindered consumer access to credit, limited innovation, and imposed unduly high compliance burdens, particularly on small institutions. Treasury’s recommendations include: making the Director of the CFPB removable at will by the President or, alternatively, restructuring the CFPB as an independent multi-member commission or board; funding the CFPB through the annual appropriations process; adopting reforms to ensure that regulated entities have adequate notice of CFPB interpretations of law before subjecting them to enforcement actions; and curbing abuses in investigations and enforcement actions.”
Not one negative accusation in the above passage is accurate. The CFPB has done a Herculean job of preventing the little guy in America from being further fleeced by Wall Street, mortgage servicers and lenders, student loan purveyors, debt collectors, credit card companies and so forth.
As for making the Director of the CFPB “removable at will by the President,” our readers should consider how this has worked out for the FBI. As for structuring the CFPB as a “multi-member commission or board” one need only look at the unfilled empty seats on existing regulatory bodies to see how that gambit can be gamed.
The Treasury report fulfills a priority item on Wall Street’s wish list: gutting the CFPB’s Consumer Complaint Database. Last September, Wall Street On Parade reported as follows on the CFPB complaint database:
“If you are one of the lucky Americans who has not already been mugged in the shopping aisles of the financial supermarkets, you should carefully browse through the database to see what awaits the unwary. Just go to the complaint archive, and place the name of any bank you want to examine in the upper right-hand search box. Searching under the name Citibank (part of the Wall Street behemoth Citigroup) will bring up 29,000 rows of complaints. A search under Chase, part of the mega Wall Street bank, JPMorgan Chase, brings up 37,000 rows of complaints.
“After years of being charged by Federal regulators for abusing their customers and the public trust, both U.S. banks became felons on May 20 of  when they admitted to felony charges related to rigging foreign currency markets.
“Wall Street banks are intended to function as efficient allocators of capital to grow new businesses and industries in America. But since the Glass-Steagall Act was repealed in 1999 under pressure from Citigroup, Wall Street’s biggest banks increasingly function as legalized loan sharking operations – targeting the poor, minorities and financially unsophisticated. In what has become a highly efficient, wealth transfer mechanism, billions of dollars each month move from the pockets of those least able to protect themselves from financial abuse to the coffers of the one percent in America who sit in the executive offices of these banks.”
The one percent do not just sit in the executive offices of these banks. They also sit in President Trump’s cabinet, which shares many mutual interests with Wall Street’s billionaire crowd. The Treasury report has the following in mind for the CFPB’s Consumer Complaint Database:
“The CFPB’s Consumer Complaint Database should be reformed to make the underlying data available only to federal and state agencies, and not to the general public.”
In other words, put a blindfold on the consumer and gut their ability to share their negative experiences with a financial service provider with their fellow citizens.
To fully grasp the control that Wall Street now holds on Washington, one needs to remember that Wall Street has already placed an unprecedented blindfold on both investors and consumers by running its own private justice system outside of the U.S. court system. Known as mandatory arbitration, Wall Street is the only industry in America which forces its customers and employees to agree to forego use of the Nation’s court system as a requirement to open a customer account or to gain employment in the industry.
Using that shield of darkness, customer and employee complaints are ushered into a star chamber system where case law and legal precedents are thrown out the window; where discovery is limited; where reasoned decisions citing to case law are not provided to the parties; where the press is denied access to the proceedings; and where arbitrators have a lucrative, repeat-player conflicted status – distinctly contrary to the Seventh Amendment’s guarantee of a right to a jury trial for claims exceeding $20.