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CFPB Under Richard Cordray Tries to Cover Up Shameful Persecution of Auto Lenders

The out of control rogue CFPB caught trying to persecute auto lenders for racial discrimination based on bogus informaton The out of control rogue CFPB caught trying to persecute auto lenders for racial discrimination based on bogus informaton[/caption] Much like using a ready, fire, aim approach to shooting at targets, the Consumer Financial Protection Bureau (CFPB) appears to have conducted in racial discrimination witch hunt against auto lenders in this same manner. The CFPB investigated and sought racial discrimination charges against auto lenders, as it turns out, on the basis of guessing the race and ethnicity of borrowers based on their last names, and using this “evidence” to prove their allegations. Only 54 percent of those identified as African-American by this “proxy methodology,” the Wall Street Journal reported, were actually African-Americans. The CFPB drafted rules to solve a problem they only believed existed, racial discrimination in auto lending. And instead of gathering real data that might prove the allegations, the CFPB appears to have made it up. Rep. David Scott (D-GA) questioned the practices of the CFPB, calling them “deceitful” in going after auto lenders, and after examination by Congress, a large bipartisan super-majority voted roll back the CFPB’s auto-loan rules. The vote took place after the release of a House committee report exposing the fact that discrimination had been alleged against auto lenders based on the guessing of last names of borrowers. Unable to sustain its non-transparency policy, the bureau eventually released some information on its guessing methodology, and outsiders have been poking holes in it ever since. The Wall Street Journal recently recreated the algorithm used by the bureau to do its guesswork and tested it with some well-known politicos,” the Wall Street Journal reported, “The algorithm didn’t know what to make of such last names as “Kasich” and “Obama.” The CFPB and Cordray tried to not release the details of how they targeted auto lenders for the racial discrimination charges, and it was only the work of the House Financial Services Committee chaired by Rep. Jeb Hensarling (R-TX) that brought to light the bogus process by which auto lenders were accused of racial discrimination that lead to settlements in the order of hundreds of millions of dollars.This illegal guessing game of name-that-race underscores how much antidiscrimination law has become a political shakedown, and how the consumer bureau is a lawless body that needs to be reined in if it can’t be eliminated,” the Wall Street Journal observed. The CFPB was created under the Dodd-Frank law passed by Congress, and the Director of the agency is a very liberal Democrat, former Ohio State Representative, named Richard Cordray, appointed to head the agency by President Barack Obama. The persecution of auto lenders based on bad information won’t surprise those familiar with how the CFPB under Cordray tired to destroy the small-dollar lending industry. Cordray appears to have decided for himself, regardless of what the available information shows, that small-dollar lenders are abusing customers, and that those customers would be better without any access to credit products rather being served by payday lenders. Cordray designed regulations that would make it impossible for such lenders to comply and still remain profitable in the business. If Cordray wasn’t trying to use the regulations to destroy this industry, he certainly could have not designed regulations that would be any more effective in achieving the goal of putting small-dollar lenders out of business. This rogue agency, under Director Richard Cordray, the CFPB, appears to be more concerned with executing a hard line ideological agenda to punish financial industries rather than fairly regulate them to stop the most egregious practices and regulate in a fair and balanced many that would truly protect consumers. That agenda seems to be one of “protecting” the middle and low income consumers served by these financial industries by destroying the businesses that serve their credit needs. The way Cordray and the CFPB are operating, the agency should be renamed the Anti-Consumer Bureau.  ]]>

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