So here we are amidst a crackdown on financial institutions, wondering what ideas and restrictions are yet to come out of Washington, D.C. This is the formative stage of the Consumer Financial Protection Bureau (CFPB), the new organization designed to help consumers ferret through the dark doings of bankers.
And yet, we have to wonder, if the CFPB is as benevolent as it professes to be, why is it insisting on secrecy and darkness over its own operations?
In April, Elizabeth Vale came to visit New England’s bankers. Vale is a former Morgan Stanley honcho who is now the CFPB’s liaison to community banks. The CFPB is still in a fact-finding mode – a sort of community outreach season – and Vale’s visit was supposed to be an early discussion about fears that bankers have over the new bureau’s aims. The setting was a special CEO luncheon at the annual BankWorld expo in Connecticut.
But Vale made the visit with one hard-and-fast rule: She wouldn’t speak, wouldn’t take questions and wouldn’t show up if there was any press around. Vale said she made the condition “on advice of counsel.”
There are certainly good reasons to have a closed discussion with bankers. The biggest one is to ensure a candid and frank exchange. Bankers might be hesitant to speak their mind openly if they are afraid of being quoted. Which is why, even before Vale was invited, the Connecticut Bankers Association had worked that issue out with the press. Reporters would be allowed to attend, but wouldn’t be allowed to quote any bankers. The press reports would say something like, “When one banker asked about X, Vale responded with Y.”
The bankers, then, had no objection. And absent their concern, we are flummoxed at why the CFPB’s attorneys believed there would be anything in a question-and-answer session that needed to be hidden from publicity.
At roughly the same time, though, Elizabeth Warren was addressing Congress on its concerns about this powerful new organization. The bureau was Warren’s brainchild, and she has been tasked by President Obama to get it on its feet. She has repeatedly made the laughable assertion that hers is “the most constrained” agency operating in Washington.
We would like to give Warren the benefit of the doubt. We would like to approach July, when the bureau officially goes live, with an air of acceptance and sanguinity that it will be an organization of moderate temper – not inclined to let banks undercut consumers, but also not inclined to endanger the financial institutions we all need to survive.
But Elizabeth Vale’s visit troubles us. Not because, as press, we were prohibited by her handlers from the luncheon. But because it should trouble us all when powerful government agencies seek to operate outside the glare of public scrutiny. In darkness and secrecy, hubris and corruption grow. It’s clear that Warren’s organization is already planting seeds in the shadows, rather than embracing the sunlight of operating transparently.
The question, of course, isn’t really what Vale said or didn’t say during her visit. Reports from bankers who attended said the interaction was underwhelming. But what is important is that, when given the opportunity to set the example of being an open and honest agency, without reason the CFPB chose to do just the opposite.
As citizens, we should insist on government that’s accountable. History has few examples where unstoppable power ended in a good outcome for the masses.
As individuals, we should be aghast at the CFPB’s insistence on secrecy, and we should be wary of what it’s doing.
For bankers? Well, they should be trembling in their shoes. An organization that makes secret plans is one that’s intending on striking swiftly, decisively and definitively against its enemies.
After all, it isn’t called the Bankers’ Financial Protection Bureau.
