New super agency bypasses congress – fed taxes banks

April 24, 2012 03:58

Obama and the Democrats brag about Dodd-Frank as one of their great achievements. Now we know why. The bill gives dictatorial power to new agencies and allows unlimited collecting and sharing of your information. The agencies have no accountability to congress or voters.



Hester Peirce at Mercatus Center has the story:



“The OFR has very broad powers and very little accountability, which could cause it to compromise our financial privacy without enhancing our financial stability. The OFR will be able to use its nebulously defined powers and supercomputers to collect any information it wants. The OFR may decide that it needs to monitor the transfers that we make among bank accounts, the type of insurance we are buying, our ATM withdrawals, and the rate at which we are paying off our credit card debt and car loans. The only limit on this power is the self-restraint of the director, who has “sole discretion” over how to do his job. He has to consult with other regulators, but does not have to follow their advice.

The OFR shares many structural flaws with another powerful and unaccountable Dodd-Frank agency, the Bureau of Consumer Financial Protection (CFPB). Congress should take both agencies back to the drawing board for an overhaul that preserves their core missions, but makes them accountable to the American people.

As they are structured now, neither the OFR nor the CFPB has to answer to anyone, including the agencies within which they are housed. A single director, rather than a politically balanced board, heads both regulators. These directors serve longer terms than the President who appoints them — six years for the OFR and five years for the Bureau. Dodd-Frank limits the President’s ability to remove the CFPB director, and does not give the President the power to remove the OFR director for any reason at all. Both agencies’ budgets are free from oversight by Congressional appropriators and essentially within the sole discretion of the director. Neither is bound by the constraints of the usual government pay-scale. Both agencies have subpoena power. Finally, Dodd-Frank grants both agencies broad powers through ambiguous statutory wording that allows lots of room for creative interpretation.

What’s worse, the OFR won’t necessarily keep the information it collects close to the vest. Dodd-Frank specifically authorizes the agency to disseminate that information to, among others, “financial industry participants” and “the general public.”

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