Message from Barbara Kamm: Rethinking Dodd-Frank

You’d be hard pressed to find someone who hasn’t heard of the NSA’s phone tapping, data collection and general snooping under the guise of protecting Americans from outside threats. What you may not know is that the Consumer Finance Protection Bureau (CFPB), created in 2010 as part of the Dodd-Frank Act, may pose an even larger threat to our privacy.

On a monthly basis, the CFPB collects and monitors information on nearly 600 million personal credit card accounts, gathers data on 22 million mortgages, 5.5 million student loans and hundreds of thousands of credit scores and auto sales — all without so much as a warrant. The agency is funded through the Federal Reserve budget and has minimal Congressional oversight.

The CFPB is part of what many see as a larger problem — that of Dodd-Frank — enacted five years ago to supposedly ensure financial reform and rein in the big banks. While the big banks have the money and employees to comply, Dodd-Frank may have ended up hurting small, community-based financial institutions that don’t have the manpower or budgets to keep up with a whopping 398 new regulations so far to date.

According to a recent article in the Credit Union Journal, “Dodd-Frank has created a huge regulatory morass that has stifled innovation, delayed economic growth and sped consolidation within the credit union industry.” Despite the fact that the CFPB has the authority to exempt smaller financial institutions such as credit unions from so many rules, they have been slow to do so. This has created a regulatory stranglehold on credit unions — hurting consumers and creating a bottleneck to economic growth.

The future of Dodd-Frank and its far-reaching consequences may lie in the 2016 presidential election. For now, as we ramp up to this election, consider writing a letter to your congressman. Ask about the issues of privacy created by the CFPB and the rationale for over-regulating credit unions that played no role in creating the Great Recession of 2008. The more we join together, the more strength we have in creating change at the legislative level.