A recent Washington Post article entitled “A watchdog grows up: The inside story of the Consumer Financial Protection Bureau” makes for entertaining reading for anyone interested in learning more about the CFPB’s history. Here are some highlights:
- The CFPB’s early days were marked by clashes over the CFPB’s mission. One camp, that included many who came to the CFPB from the Fed and private sector, wanted to strive to make financial institutions more transparent so that consumers could make informed decisions. Another camp, that included devotees of Elizabeth Warren recruited from Harvard, stressed a “cop on the beat” approach that would use high profile enforcement actions to send messages.
- All CFPB hires initially went through three days of consultant-designed training called “Excellence through Collaboration and Communication.” The article quotes one former CFPB lawyer who said some people considered the training to be “a waste of three days” and indicates that the training has been shortened.
- Instability resulting from conflicts over the CFPB’s mission and the battle over Richard Cordray’s appointment as CFPB Director as well as frustration with the CFPB’s consensus–driven process were major reasons for the CFPB’s loss of many of its most talented initial hires.
- The constitutional challenge to Director Cordray’s recess appointment made the CFPB’s enforcement staff more cautious and caused the pace of enforcement actions to slow after an initial flurry of “slam-dunk” cases. The article suggests that the decision to have CFPB enforcement attorneys participate in exams was driven “in part [by a desire] to keep them busy.” (The CFPB recently ended that practice, which had been widely-criticized.)