In an interview with Jim Blasingame of The Small Business Advocate radio program, Jim Copland, director of Manhattan Institute's Center for Legal Policy, addressed the Consumer Financial Protection Bureau in light of the Senate's recent rejection of an up-or-down vote for Richard Cordray's confirmation as the director of the CFPB.
Credit has really dried up for small businesses. This is really the lifeline for small business; small banks making small loans to small businesses to go and invest. Of course, some of these small businesses are going to keep going, individuals will take out their personal credit lines, their credit cards. People running small businesses will find ways to get credit. But, the unavailability of low-cost credit for small businesses is one of the biggest, if not the biggest, problem right now in the economy.
The concern the Republicans have is that this bureau, while in concept defensible, was written into this law where there is basically no check on the power of the person running the bureau.
...And this person can effectively make unilateral decisions. No question that person is going think that these are intended to help consumers, but, they also might have massive implications for the broader economy, the ability to generate credit and the ability to generate financing mechanisms. This could have dramatic ripple through effects on the broader economy.
So I think that their concerns are well founded and what they're basically saying is, before we take one of these up for a vote, we've got to restructure this so that it is structured more like most of these federal agencies. Where there is some congressional oversight, some sort of bi-partisan commission, something so that you don't have one individual acting basically as a czar for the country's consumer finance because that's very, very dangerous if you get the wrong person in there. And I'd argue that Richard Cordray is exactly the person you have to worry about.
Jim wrote an op-ed piece published in the Washington Examiner on this topic months before the rejection of Cordray's confirmation, expressing similar views with a focus on Cordray's record as Ohio's Attorney General.