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Do We Really Need a Consumer Financial Protection Bureau

Here is a letter to the Palm Beach Post:

As the Consumer Financial Protection Bureau (CFPB) makes its debut, the absence of Elizabeth Warren is lamented – however, a larger issue at play is the existence of the CFPB itself (Obama ducks tougher fight, July 20).

Ms. Warren’s altruistic intentions are creating another federal bureaucracy that will interfere with markets.  Just as Sarbanes-Oxley creates hurdles for business; Dodd-Frank stoops to new lows in government intervention in the financial sector.  Laws already protect consumers against fraud, collusion, and the like.  Negligence in enforcing such laws does not warrant another bureaucratic oversight agency.  Furthermore, the personal responsibility of consumers to know what they are signing should not be abdicated to the government.

President Obama is not ducking a tough fight by passing over Ms. Warren to head up the CFPB, having already conceded the real fight by continuing the bailout economics of his predecessor.  Allowing institutions to declare bankruptcy is crucial because it signals the consequences of failure and triggers necessary market corrections.  Absent the natural boom-bust cycle perpetuated by propping up failed institutions, the CFPB is essentially useless and another waste of taxpayer dollars.

Sincerely,

Craig D. Schlesinger

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