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Wednesday, December 21, 2016

CFPB Tales Told Out of School

Adam Levitin:

CFPB Tales Told Out of School: Former CFPB enforcement attorney Ronald Rubin has a lengthy attack on the CFPB in the National Review. It's got lots of sultry details, but there's nothing new and verifiable in the piece.  Instead, it's all tales told out of school, unverifiable personal anecdotes by Rubin, who seems to have an particular axe to grind with certain other CFPB staffers, and an ideological one too. Incredibly, Rubin, a former Managing Director for legal and compliance at Bear Stearns, holds up the oft-feckless SEC as a model of good enforcement practice, and criticizes the CFPB for any departures from that practice. 
The point of the piece seems to be that the CFPB is an agency gone rogue and that this wouldn't have happened if the CFPB had just been structured as a bi-partisan commission. That's hogwash. Assume that everything Rubin claims is true and correct. Even if so, every single problem Rubin identifies in the piece could just as easily have occurred at a bi-partisan commission. ...
Rubin's conclusions just don't follow from his non-verifiable personal evidence. Indeed, the very fact that the CFPB hired people like Rubin and Leonard Chanin seems to belie his claims of partisan hiring practices; Rubin is a guy who went from the CFPB to be a Republican staffer for the House Financial Services Committee, after all. Rubin's conclusions do follow from his anti-regulatory world view whose "primary influences were my business-school professors at the University of Chicago, the epicenter of free-market capitalism." Yup.

    Posted by on Wednesday, December 21, 2016 at 11:06 AM in Economics, Financial System, Regulation | Permalink  Comments (12)


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