The spirit of the Obama administration lives — only Barack Obama is gone — in the bureaucracies that imagine they were established to harass taxpayers. One of these is the Consumer Financial Protection Bureau, or the CFPB, one of the toxic vegetables in Washington’s alphabet soup. Protecting the bureau, as the bureau sees it, is Job 1.
The consumer bureau is an example of what happens when an agency of the government goes rogue. This is what the Founding Fathers feared, with no effective accountability to keep the powers of the state in check so that personal liberty would not be infringed.
Under Richard Cordray, whom Mr. Obama appointed to lead the bureau and who is often busy cultivating an ambition to run for governor of Ohio, the agency lumbers about trying to insert itself into whatever issue it stumbles on. Crusading consumer advocates are fine when they’re outside the government, but once inside the government they’re no longer advocates, and should pay close attention to issues like property rights and due process. Rogue agencies routinely set aside actual duties to feed their own visions of justice.
Over the past months private investors have been trying to recoup what they’ve paid out and are owed in the student-loan market. One of these investors, the National Collegiate Student Loan Trusts, has come under particular scrutiny because it may not have proper title to the loans it claims to own. Ownership records, in fact, are incomplete. The student-loan trust should move slowly through the legal process to get what it may be owed.
Instead, the trust argues that it should be allowed to come up with its own methods of collecting the debts, to which the Consumer Financial Protection Bureau has apparently agreed. This in turn has enabled Vantage Capital Group, a venture-capital company which holds a major interest in the trusts, to take over the legal process. That’s nice work if you can get it, and you can usually get it from a compliant government agency.
None of this sounds particularly pro-consumer. It could endanger funding for private student loans, and is just the kind of crony capitalism that President Donald Trump promised to eliminate when he drains the swamp.
If Mr. Cordray and the Consumer Financial Protection Bureau are trying to settle at the bureaucratic level a dispute that should be fought out in court, they are exceeding the authority they were given when the agency was created. Due process was meant to protect us all, borrowers and creditors alike. It’s not within the authority of an administrative agency inside the executive branch to substitute its whims, wishes and dreams for judgment by the law.
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