More on the CFPB's Jurisdiction

Recently, we've posted about the degree to which the Consumer Financial Protection Bureau (CFPB) should look out for the interests of the businesses it regulates (in a guest post by Rob Bramson) and the CFPB's assertion of jurisdiction over lawyers' activities in some situations (in a post noting the American Bar Association's opposition).

Now, in a guest post, CL&P Blog reader and consumer lawyer Nicole Mayer expresses her view:

GUEST POST

The work of the Consumer Financial Protection Bureau over the past few months has sparked complaints about its seemingly wide-spread jurisdiction.  The complainants keep forgetting that this is the CONSUMER FINANCIAL Protection Bureau.  What’s in a name?  A lot!

One has to wonder if the same group of dissenters would find it acceptable to limit other government agencies in the same manner they wish to limit the CFPB.  Would they take issue with a decree that the Department of Justice could carry out justice in no cases except those involving murder?  What would they think about the Food and Drug Administration having authority to regulate food but not drugs?  What if we took away the Federal Communication Commission’s ability to oversee anything except radio broadcasting?  Or, what would the reaction be if the Bureau of Alcohol, Tobacco, Firearms and Explosives only had authority to safeguard the public against tobacco?  You catch my drift. 

If government agencies did not have jurisdiction over the fields their very name includes, we would find ourselves in need of a million different agencies and would face a whole new host of complaints.  The issues taken on by the CFPB all focus on protecting consumers in consumer financial transactions and are therefore, legally within its purview. 

The gripe that the CFPB exemplifies "too much government regulation,” when coming from those involved in big businesses that provide products and services to consumers, strikes me as particularly ironic given the self-fulfilling prophecy created by their own business decisions.  Perhaps a valuable lesson can be learned here to be careful what you wish for because you just might get it.

Many of the CFPB critics are the same people who hire teams of lawyers to create iron clad consumer arbitration agreements and who celebrate every time a court rules against a consumer in favor of the black hole of individual consumer arbitration.  Despite their claims that “the private sector does everything better,” these individuals’ actions indicate that they want less private sector activity, at least when it comes to court activity.   With the private rights of action being stripped away from consumers and consumer advocates, who else but the government has the ability to step up and regulate consumer financial transactions?

 

Maybe one day the tides will change and arbitration will go back to being a forum for business disputes.  On that day, maybe consumers will no longer be denied access to courts.  And, just maybe on that day, we won’t need as much government regulation.  But until then, I, for one, am glad the CFPB is on the beat and turning up the heat.