Former Regulator Points to CFPB Failure behind Wells Fargo Scandal
The Weekly Standard has just published another article written by attorney and former regulator Ronald L. Rubin that you will want to read.
The CFPB has generated a lot of press in its pursuit of Wells Fargo. And the bank actually did harm consumers by opening up new accounts in their name without their consent, but, as Rubin reminds us, the agency has had plenty of opportunity to spot the fraud. In fact, when the CFPB was first created 6 years ago, it had little to do but regulate the big banks – including, of course, Wells Fargo. So, what about all those accounts Wells opened in 2012, 2013 and 2014?
The hidden lesson in all this? That financial regulators need oversight, too, Rubin argues.
“[T]he Wells Fargo incident is a perfect illustration of what is both right and wrong about the CFPB,” he notes. “On the one hand, the bank employees’ widespread misbehavior is a reminder that, in the absence of transparency and effective oversight, financial institutions can and often do make big mistakes. On the other hand, the CFPB’s failure to quickly discover and stop the pervasive, prolonged fraud is a reminder that the same principle applies to government agencies.”
The article follows another critical piece Rubin wrote for the Standard noting the CFPB’s habit of targeting flashy, high-dollar, high-profile investigations.
You can find Ronald Rubin here.