Despite Some PR Spin, the Top U.S. Bank Cop Is Still Pushing the Same Anti-Consumer Agenda
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But the so-called "support" that Dugan and the OCC offer for an independent consumer regulator is actually weaker even than this. The OCC doesn't want the CFPA to be able to enforce the few rules it could actually write. Enforcing consumer protection would be a power preserved for the OCC. And again, the OCC's track record does not instill confidence. During the height of the subprime lending boom, there were good rules on the books that could have prevented the meltdown—but the OCC simply did not enforce those rules.
Because the OCC and other federal regulators were so indifferent to consumer protection over the past decade, the only truly stand-out regulators in this area have been at the state level. But whenever state regulators attempted to crack down on an abusive bank, the OCC stepped in to block them. With the 2004 lawsuit, the OCC invoked a power known as "preemption," which allowed the agency to simply overrule any state regulation concerning big banks. That era ended last year, when the Supreme Court scaled back some of the OCC's authority and gave states the power to enforce their own consumer protection laws against big banks. But Dugan and the OCC are currently pushing Congress to enact a law reversing the Supreme Court ruling.
Taken together, the OCC's official policy stance is actually for weaker consumer protection rules than those that currently exist. The independent CFPA envisioned by Dugan would be effectively powerless, and the state regulators would not have the authority to step in where the CFPA proved insufficient. Instead of strengthening the framework that lead the economy to the brink of collapse, Dugan wants to sabotage it further. The OCC is pushing the same anti-consumer agenda it has been promoting for months, but the agency is dressing up its deregulatory fervor in the language of support for meaningful reform.
Zach Carter is an economics editor at AlterNet. He writes a weekly blog on the economy for the Media Consortium and his work has appeared in the Nation, Mother Jones, the American Prospect and Salon.