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This article leaves off a very critical detail around why people were critical of the CFPB in the first place. Contra this statement: > Their unease had only

This article leaves off a very critical detail around why people were critical of the CFPB in the first place. Contra this statement: > Their unease had only grown as Mulvaney ordered a hiring freeze, put new enforcement cases on hold and sent the Federal Reserve, which funds the C.F.P.B., a budget request for zero dollars, saying the bureau could make do with the money it had on hand. That was advertised as a feature of the CFPB when it was originally created, as they are funded from the fines they collect from violations. Anyone who has a problem with the incentives in privatized prisons should have a problem with the funding structure of the CFPB, as they are both policing for profit.

JohnFen 8y ago
The main problem with things like privatizing prisons is that doing so seriously reduces the ability of the citizenry to affect how they operate, compared to them being run by the government.
- abernard1 8y ago
  In that case, the citizenry voted their opinions on how the government should run the CFPB for 4 years.
  - JohnFen 8y ago
    That's a bit of a stretch. But at least the citizenry is able to do so.
- wavefunction 8y ago
  And often, that's the idea, that privatizing what was originally something with some social oversight into something that can be abused. One glaring example for me is that the NSA is mostly contractors now.
- specialist 8y ago
  Privatization is an unintended side effect of increasing government transparency (FOIA). Just like the combo of increased roll call votes [1] and public disclosure commissions inadvertently increased the power of lobbyists, by allowing them to verify bought politicians stayed bought. [1] vs voice votes, show of hands, other secret ballots
geofft 8y ago
My problem with private prisons is not the fact that they're "policing" but about the injustice of keeping a human body in a cell in degrading conditions, which does not apply to the CFPB's actions, and the incentives about that. It seems equally sensical to argue that I should have a problem with the Rust compiler because it strictly enforces rules about appropriate behaviors, just like prisons do.
CPLX 8y ago
They are not the same thing. A government program with a dedicated funding system (like, for example, the FAA) is a different thing entirely from a for profit entity. The tell is that there’s no such thing is “profit” in a government context.
matt4077 8y ago
That’s wrong. See Section 1017 of the Dodd-Franken act: https://www.govinfo.gov/content/pkg/PLAW-111publ203/html/PLAW-111publ203.htm https://www.govinfo.gov/content/pkg/PLAW-111publ203/html/PLA... The bureau gets its funding from the Federal Reserve System. What the argument may or may not have been is that fines would exceed operating costs. But they don’t go directly to the bureau, which therefore still needs to finance its operations. Collected fines do not go into the bureau’s general operating budget, but are supposed to be used for compensating victims or, if that’s not possible, specifically into financial literacy programs. Quote: “There is established in the Federal Reserve a separate fund, to be known as the ``Consumer Financial Civil Penalty Fund'' (referred to in this section as the ``Civil Penalty Fund''). The Civil Penalty Fund shall be maintained and established at a Federal reserve bank, in accordance with such requirements as the Board of Governors may impose. If the Bureau obtains a civil penalty against any person in any judicial or administrative action under Federal consumer financial laws, the Bureau shall deposit into the Civil Penalty Fund, the amount of the penalty collected. (2) Payment to victims.--Amounts in the Civil Penalty Fund shall be available to the Bureau, without fiscal year limitation, for payments to the victims of activities for which civil penalties have been imposed under the Federal consumer financial laws. To the extent that such victims cannot be located or such payments are otherwise not practicable, the Bureau may use such funds for the purpose of consumer education and financial literacy programs.”
JackFr 8y ago
> That was advertised as a feature of the CFPB The feature was not so much the fine paying for it, but rather Congress being unable to pressure it via the pocketbook. Which presumably Elizabeth Warren regrets now.

JohnFen 8y ago

The main problem with things like privatizing prisons is that doing so seriously reduces the ability of the citizenry to affect how they operate, compared to them being run by the government.

abernard1 8y ago
In that case, the citizenry voted their opinions on how the government should run the CFPB for 4 years.
- JohnFen 8y ago
  That's a bit of a stretch. But at least the citizenry is able to do so.
wavefunction 8y ago
And often, that's the idea, that privatizing what was originally something with some social oversight into something that can be abused. One glaring example for me is that the NSA is mostly contractors now.
specialist 8y ago
Privatization is an unintended side effect of increasing government transparency (FOIA). Just like the combo of increased roll call votes [1] and public disclosure commissions inadvertently increased the power of lobbyists, by allowing them to verify bought politicians stayed bought. [1] vs voice votes, show of hands, other secret ballots

geofft 8y ago

My problem with private prisons is not the fact that they're "policing" but about the injustice of keeping a human body in a cell in degrading conditions, which does not apply to the CFPB's actions, and the incentives about that. It seems equally sensical to argue that I should have a problem with the Rust compiler because it strictly enforces rules about appropriate behaviors, just like prisons do.

CPLX 8y ago

They are not the same thing. A government program with a dedicated funding system (like, for example, the FAA) is a different thing entirely from a for profit entity. The tell is that there’s no such thing is “profit” in a government context.

matt4077 8y ago

That’s wrong. See Section 1017 of the Dodd-Franken act: https://www.govinfo.gov/content/pkg/PLAW-111publ203/html/PLAW-111publ203.htm https://www.govinfo.gov/content/pkg/PLAW-111publ203/html/PLA... The bureau gets its funding from the Federal Reserve System. What the argument may or may not have been is that fines would exceed operating costs. But they don’t go directly to the bureau, which therefore still needs to finance its operations. Collected fines do not go into the bureau’s general operating budget, but are supposed to be used for compensating victims or, if that’s not possible, specifically into financial literacy programs. Quote: “There is established in the Federal Reserve a separate fund, to be known as the ``Consumer Financial Civil Penalty Fund'' (referred to in this section as the ``Civil Penalty Fund''). The Civil Penalty Fund shall be maintained and established at a Federal reserve bank, in accordance with such requirements as the Board of Governors may impose. If the Bureau obtains a civil penalty against any person in any judicial or administrative action under Federal consumer financial laws, the Bureau shall deposit into the Civil Penalty Fund, the amount of the penalty collected. (2) Payment to victims.--Amounts in the Civil Penalty Fund shall be available to the Bureau, without fiscal year limitation, for payments to the victims of activities for which civil penalties have been imposed under the Federal consumer financial laws. To the extent that such victims cannot be located or such payments are otherwise not practicable, the Bureau may use such funds for the purpose of consumer education and financial literacy programs.”

JackFr 8y ago

> That was advertised as a feature of the CFPB The feature was not so much the fine paying for it, but rather Congress being unable to pressure it via the pocketbook. Which presumably Elizabeth Warren regrets now.