From the Web: A `Strong Case for Consumer Protection and Free Markets’ at the BCFP


The bureau’s acting deputy director Brian Johnson outlines priorities for protecting consumers and working with industries it regulates in recent speech.

12/6/2018 9:00

Bureau of Consumer Financial Protection Acting Deputy Director Brian Johnson addressed changes at the bureau in the last year, concerns from critics and priorities going forward in a speech before the Consumer Empowerment Conference in November.

Johnson spoke last month as the bureau awaited a decision from the U.S. Senate to confirm Kathy Kraninger as its director for a five-year term, which happened today.

Forbes contributor Norbert Michel said the speech provided a clear outlook on work at the bureau.

“It is a great speech, and it clearly answers the bureau’s critics who insist the Trump administration is ‘undermining the bureau’s mission, or putting the financial interests of banks ahead of consumers, or dismantling the agency from within for political gain,’” Michel reports.

Highlights from Johnson’s speech include:

  • “… If folks want to believe that we’re somehow trying to harm consumers, that is fine. We have thick skin. But it’s not really productive, because you certainly won’t convince us that that is our intention, and it tends to distract from our shared mission. The harder and more rewarding thing to do is to exchange ideas, to be exposed to different perspectives, and hopefully to learn from one another.”
  • “… When considering how we go about fulfilling our mission to protect consumers, it is perhaps helpful to understand that we are guided by a presumption in favor of consumer choice. That is our guiding principle. Because when consumers are free to choose among an array of financial products that potentially suit their needs, it creates competition, expands choice, and promotes individual autonomy, and liberty. It’s an environment where everyone is better off. And the Bureau can support that marketplace by making sure consumers have good information and are properly educated about financial products.”
  • “Indeed, when regulators provide clear and simple rules and reinforce the rule of law, it helps facilitate a productive marketplace where lenders want to lend and borrowers want to borrow. Where there are mutual gains from trade. Where everyone is better off.”
  • “Regulatory capture can take many forms. Entrenched industry can benefit from new and onerous regulations that make it difficult for new business to form and enter the market. Alternatively, industry with access to political power benefit when regulators make substitutes for their products more expensive. Such activity reduces competition and raises prices for consumers by creating inconsistent rules that artificially segment the consumer loan market.22 Our goal is to represent all consumer voices and improve aggregate consumer welfare.”

Johnson concludes, discussing a 21st century approach to regulation, “The bureau’s approach must reinforce the basic institutions that support these outcomes. But that means the Bureau has to engage in light-touch, consumer-first regulatory policy. Not heavy-handed, outdated regulation that is ill-equipped to deal with the technological demands of the 21st century. The lessons of the past must guide us into the future.”

Read the complete speech on the bureau’s website.

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