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CFPB: Bureau or Bureaucracy?
September 21, 2011



Although Elizabeth Warren has left the Consumer Financial Protection Bureau, her views continue to provide inspiration to its management and staff. Perhaps it would be wise to read the article I wrote last October, outlining the CFPB, its mandates, and its prospects. 


Understanding the purpose, structure, and guiding philosophy of the CFPB is an important and necessary undertaking.

First published in October 2010, this article is as timely now as it was a year ago!  


This article provides analysis, a useful chart, comments, references, and helpful resources.   



Jonathan Foxx - Portrait
Jonathan Foxx
President and
Managing Director






But first, a Thought Experiment (Excerpt)             

A vast, entangled array of very small and sleek wires, super strong magnets, and very wide and long cables extend out omnidirectionally - all of which lines and circuits are laid throughout a network of interlocking, electrically generated devices that are held in place in their respective positions on a shaky iron scaffold by fraying, single-knotted ropes.

The devices are needed to power vital and critical services to a community. But, due to wear and tear on their bindings, some devices are about to break free, threatening to pull down with them the entire array of wires, magnets, cables, and other devices. Any device can plummet at any time. Before it is too late, all the lines must be disentangled, traced to each of the devices, and rerouted to a new and more stable grid; plus, the devices themselves must be transferred, one by one, to the new grid without damaging them, and then reconnected to their lines. But the collapse can take place at any time.

A "crisis" looms!

So, how are you going to accomplish this heroic task quickly and effectively?


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Now let's consider this analogue ... (Excerpt)
The energy source is Constitutional authority; the grid is the financial regulatory framework; wires and cables are the ways and means that implementing regulations affect one another; magnets are the legal foundations (i.e., case law precedents (stare decisis), statutes (federal and state), Constitutional laws or rights) on which all subject enumerated laws (see below) rest; devices are the existing regulations; and ropes are the various governmental agencies that are charged with enforcement of and monitoring compliance with specific implementing regulations.

By the end of this article, I hope you will have decided how best to solve the above-described and admittedly convoluted "crisis." This article and the preceding articles in this series outline how Congress decided!

Enumerated Laws     

The "enumerated laws" include:

    Alternative Mortgage Transaction Parity Act (AMTPA)
    Community Reinvestment Act (CRA)
    Consumer Leasing Act (CLA)
    Electronic Funds Transfer Act (except the Durbin interchange amendment) (EFTA)
    Equal Credit Opportunity Act (ECOA)
    Fair Credit Billing Act (FCBA)
    Fair Credit Reporting Act (except with respect to sections 615(e), 624 and 628) (FCRA)
    Fair Debt Collection Practices Act (FDCPA)
    Federal Deposit Insurance Act, subsections 43(c) through 43(f)(12) (FDIA)
    Gramm-Leach-Bliley Act, sections 502 through 509 (GLBA)
    Home Mortgage Disclosure Act (HMDA)
    Home Ownership and Equity Protection Act (HOEPA)
    Real Estate Settlement Procedures Act (RESPA)
    S.A.F.E. Mortgage Licensing Act (S.A.F.E. Act)
    Truth in Lending Act (TILA)
    Truth in Savings Act (TISA)
    Omnibus Appropriations Act- Section 626 (OAA)
    Interstate Land Sales Full Disclosure Act (ILSFDA)

The Bureau would be assigned primary authority to enforce the aforementioned laws, but other federal regulators, including the Department of Housing and Urban Development ("HUD"), the banking agencies, and the Federal Trade Commission, would retain overlapping, secondary enforcement authority over certain requirements.

State Attorneys General would be empowered to enforce federal laws under the Bureau (subject to any existing limitations in the laws to be transferred to the Bureau's authority). And state consumer financial protection laws would not be preempted, except to the extent that they are inconsistent with federal law (although such state laws could be stricter than the federal laws, in which case they would not be preempted by federal law).


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What do you think?

I hope you enjoy the article.

Please feel free to comment

in the Discussion Forum.

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