Big Brother plans to force another housing crisis upon us

Readers may remember that we discussed the Consumer Financial Protection Bureau last year, and again in April this year.  I said of it in 2011:

If you believe any Government agency can be trusted to set its own agenda, appoint its own personnel, determine its own budget and operate from day to day without legislative oversight, there's a bridge in Brooklyn, NYC that I'd like to sell you. Cash only, please, and in small bills.

As Charles Hugh Smith pointed out earlier this year:

“Despite the vast power vested in the hands of the director, there are no effective checks on the director’s authority,” said Sen. Richard Shelby, the ranking Republican on Banking Committee.

“When you set up something that is outside the control of the elected branches, when you set up something that doesn’t require the appropriations by Congress to make sure they can continue their work only on the basis of their complying with the constitutional requirements, then you have essentially set up the potential for a rogue agency which does not have any controls and therefore you’re affecting the liberty of the people.”

There's more at the link.

Our worst fears appear to have been realized.  The CFPB has just proposed a new scheme that's almost guaranteed to produce a housing crisis worse than that which began in 2007.  The American Spectator reports:

Last week Richard Cordray, who is serving as a disputed recess appointee without the consent of the Senate, announced that not only will CFPB be going after banks but will also target the credit rating agencies that evaluate people's creditworthiness based on past performance in paying debts. They too will be vetted for racial discrimination.

. . .

... credit ratings are pretty accurate. Banks rely heavily on them and say that, if anything, the agencies tends to underestimate the rate at which minority buyers will default on mortgages.

So guess what happens next? Under the pretext of "regulating" the agencies, CFPB will hammer away, forcing them to upgrade the scores of blacks and Hispanics. Standards will be diluted or abandoned entirely and within a few years the banks will be flying blind with no reliable information on who is a good credit risk and who isn't. Does that sound like the formula for another mortgage meltdown? It sure does to me.

. . .

I think what we are witnessing is the looting of America on behalf of minorities in a way that better end soon or we are going to bring the whole system down upon our heads.

With the current administration in power, the perception is growing among minorities that everything in the economy can be had for free and that President Obama and his administration are going to provide it for them.

. . .

It is symptomatic of a rising tide of dependency and the growing sense that nobody has to be responsible for anything anymore and we can all live off "the rich." If we don't get these people out of office soon, there isn't going to be much left to pick over in the American economy.

More at the link.

Draw your own conclusions, friends.  Mine is that the author's last line quoted above is pretty accurate.

(A tip o' the hat to The Smallest Minority for drawing my attention to the American Spectator article.  I think his concluding thoughts are pretty appropriate, too!)





Peter