The Stalinist Era of Consumer Protection

Joseph Vissarionovich Stalin was a part of The October Revolution in 1917… or the Bolshevik Revolution, if you grew up during the Wonder Years here in the USA.  Following the death of Vladimir Lenin in 1924, he consolidated power, put down competing factions within the Communist Party and was the Premier of the Soviet Union from 1941 to 1953.

Stalin is known for increasing the power and scope of the state’s secret police and intelligence agencies.  After WWII, he became the focus of literature, poetry, music, paintings and film.  He was credited with almost god-like qualities, accepting numerous titles, including Coryphaeus of Science, Father of Nations, Brilliant Genius of Humanity, Great Architect of Communism, Gardener of Human Happiness, and others.  Leon Trotsky criticized Stalin’s “cult of personality,” so in 1940, Stalin had his secret police in Mexico assassinate him.

As the head of the Politburo, he consolidated near-absolute power during the 1930s, orchestrating the Great Purge of the Communist Party, which was justified as an attempt to expel ‘opportunists’ and ‘counter-revolutionary infiltrators’. Many that were targeted by the purge were sent to Gulag labor camps… others were simply executed after NKVD troikas, which amounted to three people who convicted without trial.

According to official Soviet estimates, more than 14 million were sent to the Gulag between 1929 and 1953, with another 7 to 8 million deported and exiled to remote areas of the Soviet Union.  It is estimated that up to 43% of them died of diseases or malnutrition.  But, all of that was only the tip of the iceberg… en total, it is estimated that Stalin was responsible for the deaths of some 60 million people.  The things Stalin did were so horrific they cannot be comprehended… and in fact, he makes the top three of every list of the most evil genocidal murderers I could find online.

So, you can imagine my surprise when on “Meet the Press” yesterday, when Senator Lindsey Graham was asked why Senate Republicans blocked the appointment of Richard Cordray to head the Consumer Financial Protection Bureau (“CFPB”), he responded by describing the new agency as, “something out of the Stalinist Era.”

Now, it would be easy for me to make fun of this sort of statement… frankly, it’s in my nature to do so… but, I’m going to leave that to John Stewart and the rest of the folks on The Daily Show.  The truth is… this just isn’t funny any more.

The CFPB’s mandate is simply to protect consumers from financial fraud.  The idea for the Bureau originally came from Elizabeth Warren, and after a nasty political fight last year, it was written into the Wall Street financial reform legislation and signed into law.

According to Ron Suskind’s book, “Confidence Men,” however, the banking lobby told Treasury Secretary Geithner in no uncertain terms that they’d allow the Bureau’s creation, as long as Ms. Warren didn’t get to run it.  So, very nicely done there, banker people.  I’m especially glad that I wasted so much time writing articles asking people to show their support for Ms. Warren to their elected representatives.

It’s worth mentioning that the CFPB is about as benign a federal agency as could be imagined… they’ve got it operating under the Federal Reserve, for heaven’s sake.  Last week, the agency proposed a simplified credit card application designed to make costs, risks and terms easier for consumers to understand.  Here’s a copy of that Stalinist… no… I meant, simplified application:

CFPB Proposed Credit Card Applicaiton

Yeppers, after looking at that application, I see exactly what Senator Graham means now.  I mean, maybe that credit card application by itself isn’t the end of the world, but clearly it places us on a slippery slope leading directly to NKVD troikas and tens of millions sent to gulags in… let’s see, where would our version of Siberia be… I don’t know… Alabama?

Now, let us be very clear about what is going on here…

The new Consumer Financial Protection Bureau is one component of a bill that has already been signed into law by the President of the United States.  Period.  It is the law of our land.  If someone wants to change it, there is a legislative process in place for that, so by all means, go to town.  The only thing our legislators need concern themselves with is the implementation of our country’s new law. That’s their job, and the American people should be telling their elected representatives to get to work and stop screwing around.

You see, this is why we’re in the mess we’re in today… because we… and I do mean you and me… never seem to demand that this sort of thing stop immediately.  When they did away with our usury laws, the laws limiting the amount of interest that can be charged, we said nothing.  When some tried to pass laws to limit or prevent predatory lending, we hardly said a word about it.

Now, when right in front of our eyes, the banking lobby is pushing to make the only federal agency whose role is to protect consumers entirely toothless, once again we’re failing to make our voices heard.  I know this because if we were making our voices heard, no politicians would dare try to pull this sort of disingenuous crap, especially in an election year.

As it stands, and solely to appease the Republicans/bankers, the agency now reports to the Federal Reserve, which is a far cry from the original intent.

The only group that opposes the CFPB is the banking lobby and the reasons are simple… they want to continue to deceive and mistreat consumers without anyone being able to say a word about it.  They’ve been fighting any and all laws that protect consumers for 30 years now, while we’ve been sleeping… no, I mean… shopping… and this is just more of the same corrupt crap.

The only difference is that today, the Republicans… and yes, I do mean ALL of them, with the exception of those representing the Republic of Maine… are now willing to stand up and let the country see that they are here to do the bidding of the banksters.  They don’t care who gets screwed over by predatory lenders or deceptive financial product offerings.  They’re here to do what Wall Street wants them to do and that’s that.  They don’t care what the law says… bankers said no to the CFPB having any power… and no means no.

Until the CFPB’s director is confirmed, by the way, the bureau cannot use the power it received under the Dodd-Frank law… most notably it cannot regulate mortgage originators and payday lenders.  Mortgage originators and payday lenders… that’s who the Republicans are protecting by blocking all appointees?  Yes.

Currently, the board of regulators for the bureau needs a two-thirds majority to veto decisions. Senator Dean Heller of Nevada has said that the Republicans would oppose confirmation of ANY appointee unless the CFPB is restructured so that a “board of bank regulators is given the power to veto bureau decisions.”  Republicans also want Congress to be able to cut funding to the agency.  In other words, either the bankers are in control, or there will be no CFPB.

“The reason Republicans don’t want to vote for it is we want a board, not one person making all the regulatory decisions, and there’s no oversight under this person; he gets a check from the Federal Reserve.  We want him under the Congress so we can oversee the overseer,” Graham told NBC’s “Meet the Press.”

“This consumer bureau that they want to propose is under the Federal Reserve, no appropriation oversight, no board. It is something out of the Stalinist era,” Graham said.

That’s Mitch’s good side.

This idiotic, dishonest and flagrantly corrupt sentiment was echoed by Republican Senate Minority Leader Mitch McConnell who apparently said on “Fox News Sunday” that the blocking of Cordray’s appointment came as a result of his party opposing a ‘czar’ with unchecked power.

Mitch, Mitch, Mitch… we can all see what this is… it’s you and yours continuing to do the bidding of the Wall Street bankers… it’s you and yours continuing to block anything designed to help Main Street… it’s you and yours perfectly willing to be the proximate cause of untold pain and suffering for hundreds of millions of people in this country.

And, I probably wouldn’t have connected the dots before, but now that Republican Senator Lindsey Graham mentions it… that does sound somewhat “Stalinist” to me.

How about this for a 2012 slogan… “Go Stalinist.  Vote Republican in 2012!”

Or, what about… “Protecting Consumers is What’s Killing this Country.  Vote for the GOP in 2012!”

No?  Okay, how about… “Bankers Know Best… Vote Republican in 2012!”

Or… “Poor People Need Loan Sharks!  Vote Republican in 2012.”

Still no good?  Sheesh, tough crowd.

I told you this wasn’t funny anymore.


On December 6, 2011… just a few days ago actually… Minority Leader Mitch McConnell, Ranking Member Richard Shelby, Senate Banking Committee Chair Tim Johnson, and Majority Leader Harry Reid all received a letter from Rep. Elijah Cummings (D-MD)… and then they promptly and completely ignored it.  Check it out… it’s worth it.
Congressional Letter in Support of Nomination of Richard Cordray Former AG to Run the CFPB

Mandelman out.

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