Tags: ConsumerFinancialProtectionBureau | Ehrenreich

Conservatives Decry Socialist on Consumer Protection Board

By Sandy Fitzgerald   |   Wednesday, 02 Apr 2014 11:37 AM

The Consumer Financial Protection Bureau's decision to include a dedicated Socialist on one of its boards is angering conservatives, and a director from the libertarian-leaning Cato Institute says it shows how the agency picks people who "echo its own viewpoints."

Ron Ehrenreich, a 1988 vice presidential candidate for the Socialist Party USA, is part of the bureau's Credit Union Advisory Council, The Washington Times reports. He is also the CEO and co-founder of the Syracuse Cooperative Federal Credit Union.

Mark Calabria, Cato's director of financial regulation studies, said that while politics should not be part of the decision for advisory board members, involvement still raises some red flags.

He said he is concerned that the CFPB has "gone out of its way" to include members that reflect its own views, and needs to widen its selections.

"It would be great to have a broader range of people actually represented," Calabria said. "To me, I think it really speaks to very deep-seated groupthink over there that consumers are being exploited, and markets are bad, and if you don’t have lots of government regulations and lawyers, then people are going to be taken advantage of."

Ehrenreich told the Times that he was recommended to the bureau by the National Federation of Community Development Credit Unions, and as far as he knows, he is the "only Socialist on any of the advisory committees."

Meanwhile, he does not consider his board's participants to be particularly left-leaning, because members come from "an array of opinions and come from credit unions of different sizes," and that he finds some of the opinions "quite dismaying."

CFPB spokesman Samuel Gilford said his agency does not question board members' political views because that would be "highly inappropriate," and members of the Credit Union Advisory Council, like Ehrenreich, were chosen for their expertise.

Ehrenreich, who has been working in the credit industry for over 30 years, said he tries to speak up for the poor, immigrants, and refugees he serves, and plans to bring "the voice of the voiceless" to the committee.

While he is an avowed Socialist, Ehrenreich calls capitalism "the most productive system that has ever been on the face of the earth — you are hearing that from a Socialist."

However, he said capitalism also generates poverty, unemployment, and "wealth [that] is not distributed."

The CFPB was created in 2010 as part of the Dodd-Frank law after the 2008 Wall Street financial meltdown in hopes of protecting consumers from the "unsound and unscrupulous" lending practices that helped cause the crisis.

Congressional Republicans say the group needs more oversight, and on Tuesday, House Budget Committee Chairman Paul Ryan proposed taking away the agency's independent funding and putting it under strict congressional watch.

A House financial oversight committee plans a hearing on Wednesday on accusations about discrimination and retaliation with the agency. Bureau officials turned down invitations to testify, and Democrats asked that the hearing be postponed, a request that was denied.

Republicans have argued since the agency was formed that it was too powerful and needed oversight. Earlier this year, the House passed a bill to replace the bureau's long-contested director, Richard Cordray, with a five-member commission.

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