CFPB: “Too Important to Fail”

Our event this coming Wednesday will highlight a number of articles from the forthcoming, special issue of The Washington Monthly. Unfortunately, we won’t be able to highlight one of the best articles in the bunch (as the author is out of town). John Gravois’ “Too Important to Fail” was given a special release by the Monthly and is out online today, two days ahead of the rest of the magazine. In it, Gravois chronicles the creation and early action of the Consumer Financial Protection Bureau, a new federal agency charged with protecting the consumers of financial products. Long-time readers will be familiar with the CFPB and will know that we’ve been optimistic about the potential for the bureau to do quite a big of good. Gravois’ take?

We might as well just say it: saving the CFPB is essential to fixing the fundamentals of our economy and even restoring the American Dream…Predatory lending has become endemic to the business model of American finance, and until that changes, it’s hard to see how the economy can once again provide broad prosperity.

That seems like the very definition of a bold stance. However, in reading Gravois’ account of some of the tools and tactics being developed by the CFPB, it’s hard to not think he’s onto something. The CFPB, for instance, is building a database using “account-level information from nine of the largest credit card issuers—a far larger database, in other words, than what any individual issuer has on its own.” With these kinds of analytical tools, one begins to see that the phrase “leveling the playing field” might be more than just a slogan. 

Gravois concludes that the mission of the CFPB is, essentially, figuring out asset building for the bottom half of Americans:

[A]ssuming the bureau survives and can fulfill its mission, the most important question facing them will be whether they can figure out profitable ways of helping Americans build wealth. This also happens to be one of the most important questions facing the rest of us as well.

Couldn’t agree more. Now go read the whole thing and keep an eye out for much more from this special issue of The Washington Monthly.