The FTC, with its five-person commission, was attacked by Congress for implementing a vague congressional directive. A single director at the CFPB would fare even worse.
The policy focus should be how to ensure no single financial institution becomes a single point of systemic failure - not how to mitigate the fallout when such an entity fails.
The U.S. and the world should follow the lead of the U.K. Vickers report and "build a fence" around banking, so shareholder equity and depositors' money can be used only to make loans to viable borrowers.
Putting a commission in charge of the bureau would at best produce partisan gridlock, and risks handing the young agency over to financial institutions.
From the Tea Party, to the anti-Wall-Street crowd, to the silent majority that is hunkered down and fearful for the future, anger at The Establishment is higher than at any time since the Vietnam era.
I was at a summit with 300 other community bankers when we were startled by chants of "Make Banks Pay!" Occupy Wall Street and related groups see no solutions coming out of Washington they are attacking bankers as public enemy #1.
Regulators' consent orders let mortgage servicers select firms to review their actions. Allowing the banks to choose their own judge, jury, and jailer presents almost untenable conflicts of interest.
The "bigger is better" view was supported by the notion that economies of scale would allow for a multitude of virtuous outcomes. If only this were true.
Dodd-Frank will prove hugely expensive and still fail in its main mission of preventing the next financial crisis. Blame Washington and its flawed assumption that it can micro-manage the banking system.
