Pocahontas Financial Control Scheme Returns To Bite Its Creator…

Everyone is aware how apoplectic the Democrat loonery became when their best laid schemes to put Hillary in the White House ran into the reality of electoral Cold Anger carried by the deplorables.  Lots has been written about the gobsmacked reaction to the election, yet few have outlined the underlying policy reasons for the scope of the panic.

The desperate need for post-election control showcased the lefts’ reaction to fear.  However, it is only by looking at the policy groundwork they lost where a political observer can evaluate the scale of defeat.  Democrats created a continuum pathway that is now entirely controlled by the very nemesis of their controlling belief system.

In a largely under-reported story last week, President Trump installed OMB Director Mick Mulvaney as interim head of the Consumer Financial Protection Bureau, the CFPB.

The CFPB was created to establish power and control over almost every financial transaction in the United States.  But it is only when you review how Elizabeth Warren and the control agents structured the czar head of the CFPB that you recognize the scale of the intent carried within the construct.

When Senator Elizabeth Warren and crew set up the Director of the CFPB, in the aftermath of the Dodd-Frank Act, they made it so that the appointed director can only be fired for cause by the President.

This design was so the Director could operate outside the control of congress and outside the control of the White House.  In essence the CFPB director position was created to work above the reach of any oversight; almost like a tenured position no-one could ever remove.

The position was intentionally put together so that he/she would be untouchable, and the ideologue occupying the position would work on the goals of the CFPB without any oversight.

Elizabeth Warren herself wanted to be the appointed director; however, the reality of her never passing senate confirmation made her drop out.

The CFPB Director has the power to regulate pensions, retirement investment, mortgages, bank loans, credit cards and essentially every aspect of all consumer financial transactions.

However, in response to legal challenges by Credit Unions and Mortgage providers, last October the DC Circuit Court of Appeals ruled that placing so much power in a single Czar or Commissioner was unconstitutional:

[…]  The five-year-old agency violates the Constitution’s separation of powers because too much power is in the hands of its director, found the U.S. Court of Appeals for the District of Columbia Circuit. Giving the president the power to get rid of the CFPB’s director and to oversee the agency would fix the situation, the court said. (more)

After the November 8th 2016 election (during the lame-duck Obama period), the CFPB sought an en blanc review of the decision by the circuit court panel.  However, in March the Trump administration reversed the government’s position.  In essence, Team Trump was now positioned to use the power of the CFPB Director to eliminate itself. The entire DC panel heard the appellate case in May and a decision is pending. [Either outcome Trump wins]

Facing insurmountable legal headwinds, and simultaneously finding himself under the control of the executive branch, the Obama Director of the CFPB Richard Cordray announced his resignation.

President Trump has now appointed OMB Director Mick Mulvaney as interim head of the agency; with no rush on a permanent replacement. [Mulvaney will return to his role as OMB Director as soon as a permanent replacement is nominated. Until then he wears two hats.]

While in congress Mick Mulvaney, along with dozens of Dodd Frank critics, strongly opposed the creation of the CFPB and the scope of control within its mandate to regulate all consumer financial transactions.  During his confirmation hearing Mulvaney referred to the CFPB as “one of the most offensive concepts” in the U.S. government and that he stood by an earlier comment describing it as a “sad, sick joke.”

The Democrats, most specifically Elizabeth “Pocahontas” Warren and crew, are apoplectic at the end result of their too-cute-by-half plans and the possibility of their agency being deconstructed.  What is even more delicious to note – in their rush to construct the entire CFPB scheme the Dodd-Frank law does not specify the deputy director as next in line to serve in the event of a vacancy.  That means President Trump is within his normal constitutional powers to appoint whomever he likes.

In appointing Mick Mulvaney President Trump has now put in place someone who can be counted on to deconstruct Warren’s leftist plan to control all our financial transactions by dictatorial fiat and unilateral authority.   By their own doing Pocahontas et al created a situation they are now powerless to stop.

Expanding the Consequence: This now becomes a critical part of President Trump and Treasury Secretary Mnuchin’s overall strategy to create a secondary financial market for smaller banks and credit unions to operate the Main Street economy.

Because Dodd-Frank Act created even fewer and even bigger banks it’s become almost impossible to re-institute something like a Glass Steagall wall between commercial and investment divisions within banks.

Back in July 2010 when Dodd-Frank banking regulation was passed into law, there were approximately 12 to 17 banks who fell under the definition of “too big to fail”.

Meaning 12 to 17 financial institutions could individually negatively impact the economy, and were going to force another TARP-type bailout if they failed in the future.  Dodd-Frank regulations were supposed to ensure financial security, and the elimination of risk via taxpayer bailouts, by placing mandatory minimums on how much secure capital was required to be held in order to operate “a bank”.

One large downside to Dodd-Frank was that in order to hold the required capital, all banks decreased lending to shore-up their liquid holdings and meet the regulatory minimums.  Without the ability to borrow funds, small businesses have a hard time raising money to create business.  Growth in the larger economy is hampered by the absence of capital.

Another downstream effect of banks needing to increase their liquid holdings was exponentially worse.  Less liquid large banks needed to purchase and absorb the financial assets of more liquid large banks in order to meet the regulatory requirements.

In 2010 there were approximately twelve “too big to fail banks”, and that was seen as a risk within the economy, and more broad-based banking competition was needed to be more secure.

Unfortunately, because of Dodd-Frank by 2016 those twelve banks had merged into only four even bigger banks that were now even bigger risks; albeit supposedly more financially secure in their liquid holdings.   This ‘less banks’ reality was opposite of the desired effect.

The four to six big banks (JP Morgan-Chase, Bank of America, Citigroup, Wells Fargo, US BanCorp and Mellon) now control $9+ trillion (that’s “TRILLION).  Their size is so enormous that small group now controls most of the U.S. financial market.

Because they control so much of the financial market, instituting a Glass-Steagall firewall between commercial and investment divisions (in addition to the Dodd-Frank liquid holding requirements), would mean the capability of small and mid-size businesses to get the loans needed to expand or even keep their operations running would stop.

2010’s “Too few, too big to fail” became 2016’s “EVEN FEWER, EVEN BIGGER to fail”.

That’s the underlying problem for a Glass-Steagall type of regulation now.  The Democrats created Dodd-Frank which: #1 generated constraints on the economy (less lending), #2 made fewer banking options available (banks merged), #3 made top banks even bigger.

This problem is why President Trump and Secretary Mnuchin are working to create a parallel banking system of community and credit union banks, individually less than $40 billion in assets, that are external to Dodd Frank regulations and can act as the primary commercial banks for small to mid-sized businesses.

The goal of “Glass Steagall”, ie. Commercial division -vs- Investment division, is created by generating an entirely new system of smaller banks under lowered regulation.  The ten U.S. “big banks” operate as “investment division banks” and are subject to the rules and regulations of Dodd-Frank.  The smaller banks and credit unions have less regulation and operate as the “Commercial Side” directly benefitting Main Street.

Instead of fire-walling an individual bank internally (within its organization), the Trump/Mnuchin plan firewalls the banking ‘system’ within the United States internally.

 

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This entry was posted in Bailouts, Big Government, Big Stupid Government, Budget, Donald Trump, Economy, Legislation, media bias, Occupy Type Moonbats, President Trump, Uncategorized, US Treasury, USA. Bookmark the permalink.

230 Responses to Pocahontas Financial Control Scheme Returns To Bite Its Creator…

  1. Founding Fathers Fan says:

    Its Fauxcahantus. Faux is French for false.

    Liked by 5 people

    • frankie says:

      Sundance, keep an eye on Cordray.

      He became Ohio AG after fellow Dem Marc Dann was caught in a sex scandal.
      Ted Strickeland (D, opponent of child molester laws) appointed him

      Cordray protected sex offenders even when he was told one was shacked up with a prosecutor agent (D) in SUmmit COunty (D). His sex offender registry was loaded with errors and he admitted this was so because they depended on sex offenders not to lie and theiy didn’t check them out.

      When state officials (D) illegally used various prosecutor and police databases to slime Joe the Plumber, Cordray provided them with free lawyers who kept them out of jail.

      Cordray is soliciting big banks now for a run at being Kasich’s replacement next year.

      Keep your spotlight on this germ.

      Liked by 6 people

    • Exactly. I don’t want to nit pick but Pocahontas is a revered historical Indian figure and using that nickname for Lieawatha is an insult to Pocahontas. Warren should always be referred to as Fauxcahontas since it is a much more accurate name.

      Liked by 6 people

    • Krackerhac says:

      No, it’s Chief Spreading Bull.

      Liked by 1 person

  2. Michael says:

    Good article that echoes much of what Sundance wrote and provides some other background: https://www.cnbc.com/2017/11/19/the-anti-regulatory-environment-that-trump-promised-just-got-a-big-boost.html

    Liked by 2 people

  3. POP says:

    Yeah, but re Dodd Frank, if we let the Mega Banks trade derivatives with Savings deposits we are beyond normal stupid.

    Remember what the G20 agreed in Brisbane , deposits are now counted as bank assets for liquidation purposes.

    Liked by 1 person

    • Jedi9 says:

      Remember MF Global? The scum bag John Corzine got away with it. To this day nothing, nada, zilch the amount of people who were held accountable. To this day no one knows where the money has gone to.

      Liked by 2 people

    • Matthew Musson says:

      Understand that the G20 did that because the 70% of the European banks are facing default crises. All Southern European Banks (including Italy) are toast. Italy is facing a default crisis that is 4 times larger than the US subprime melt down. So, that makes it functionally 20 times worse since the Italian economy is smaller than ours.

      Liked by 1 person

  4. H&HC, 2nd-16th says:

    Rand Paul has not paid is dues yet.

    Like

  5. Good lawd, I actually understand what’s going on now. Thanks!

    Liked by 1 person

  6. tony5460 says:

    “Unfortunately, because of Dodd-Frank by 2016 those twelve banks had merged into only four even bigger banks that were now even bigger risks;” Do you mind telling us which 12 banks merged into JPM, C, WFC and BAC? I don’t recall there were any major M&A after 2010.

    Like

  7. Mike Pitzler says:

    Someone called her “Fake Indian,” and it’s stuck in my head. When I read her other name, I automatically say “Fake Indian.”

    Liked by 3 people

  8. A2 says:

    Seems like the Dems need to find better lobbyists to write their legislation. Oh, I forgot they are going broke.

    Reminds me of that little gem of a clause in NAFTA, I called the ‘self-destruct’ button.

    Liked by 1 person

    • Matthew Musson says:

      A wall needs to be built between these new small banks and the larger ones. Or else, as soon as the Dems come back into power – they big banks will buy all the little ones.

      Liked by 1 person

  9. Markus says:

    Sorry, not sure what Trump’s “reversed position” means in the above article? And why wouldn’t the Obama appointee just stay in the job and make a nuisance of himself. Can anyone help here?

    Like

    • grandmotherpatriot says:

      Read this https://tjhancock.wordpress.com/housing-bubble-financial-crisis-detailed-comprehensive-assessment/ I think it will help with your question.
      Unlike Obama and Clinton, President Trump is not appointing anyone to scam the system.

      Liked by 1 person

    • Maquis says:

      Trump just engineered the power to overeee that Commie Wet-dream farce if an agency and can fire the had at will. It seems that as the Left’s scheme is falling apart the guy decided to quit before he got canned. As he appears to have political aspirations, attempting to stay in place and be the irritating bug that Trump would inevitably squash isn’t the kind of resumé material he wants to have to defend. Ths way he can spin it to the plebs as “doing the right thing” despite it actually being saving his bacon because his plans to do the wrong thing turned turtle.

      .02

      Liked by 2 people

      • FreeLayerOK says:

        There was a small amount of info I read in the book “The Lean Startup” where the author was introduced to the founder of the CFPB because he didn’t know what he was going to do with the $500 million Obama gave him to fund this new bureau. The vision, in it’s entirety, was this protection bureau would be a call center for people to vent their complaints. Thats all. $500 million spent for a call center and a website.

        Appears to be just another of the dems redistribution of wealth schemes. It’ll be great to see Mulvaney close it down.

        Liked by 1 person

  10. C R Lord says:

    So; if I am reading this right; the arrangement that the President is making will take money away from the big banks because the little banks will be less regulated and able to offer better loans to small businesses at better rates thereby paring down the profits of the big boys.

    If that is true; the possibility exists that the bigger banks will eventually lose enough money to put a serious damper on their power and control. Maybe enough of a lost to shut them down permanently. That would be great! We might be able to get back to normal banking again with banks that can actually be trusted.

    Liked by 3 people

    • Jedi9 says:

      In theory it sounds like a good plan, but in reality I really don’t think it will be enough. The Dodd/Frank Act just needs to be eliminated altogether and the Glass Steagal Act or something like it needs to be reconstituted.

      Liked by 1 person

    • Ollie Hadfield says:

      President Trump is brilliant!

      Liked by 3 people

      • maiingankwe says:

        Ollie,
        You’re right, he most certainly is brilliant. I can’t help but imagine him spending hours upon hours on figuring out answers to our problems. I think it has taken him years to come up with all of these solutions. Some came quickly and others took a great deal of mulling over and whatever he didn’t understand he called someone who did to help him out.

        I say this only because I remember some of his old interviews and when he had been asked what he thought was currently going on in our government at the time. It seems to me he has been watching our government and all of its players very closely from the beginning of his own successes.

        I also say this because we have so many things wrong with our laws and government that it had to take a good deal of time to come up with plans to fix it. So many steps, so many pieces of the puzzle to put together. He is definitely a brilliant man, and I am ever so proud and thankful he is our President.

        OT: every time I want to post a comment I have to sign in now. Plus, I can no longer like a comment because it won’t hold me in. I get kicked back out right after I post something. I also can’t see if anyone who has responded to me. I know, I won’t be able to see how to fix it, but I can always come back to this thread to see if anyone can help me out. Is anyone else having similar difficulties or is it just my phone full of bugs?

        Like

  11. Laura Wesselmann says:

    So glad we have a financially intelligent president who understands economics! Obama was simply not that gifted a guy. Obama was an affirmative action hire.

    Liked by 3 people

    • Markus says:

      Regulate, tax, spend…no profound vision there.

      Remember when he said the answer to unemployment was a pleading if only every small business just hired one more worker each-just like a kid who assumed the owners of the local mom and pop were millionaires.

      Liked by 1 person

      • grandmotherpatriot says:

        Big difference, President Trump is de-regulating.
        My father owned a Mom and Pop manufacturing facility that gave jobs to people in the neighborhood, teenagers that needed experience and to work to save for college.
        We were well off, not millionaires, but we ate had clean clothes, and a roof over our head but most important my family was not on the dole nor were the peoples family that he employed.

        Liked by 2 people

        • sturmudgeon says:

          Thanks, grandmother… the secret is, of course, NOT ‘going on the dole’… then, the pride of (whatever level ) accomplishment will win out over any obstacle, and create a stronger ‘line’

          Liked by 1 person

          • grandmotherpatriot says:

            Never been on the dole, retired early with a full pension that I paid into and not collecting Social Security.
            Its called being responsible for oneself. But the jobs need to be available for one to work.
            This is what President Trump is trying to accomplish for America as our younger generation beleives

            Liked by 1 person

          • grandmotherpatriot says:

            That’s ” believes “. I hit send while correcting my error.
            The younger generation has zero skills and cannot find their way out of a paper box not all but most.
            In my day, one could work a full-time position and save for retirement.
            Businesses were not regulated and mandated by the government as much as they are today.

            Like

  12. Vince says:

    So, does “power over every financial transaction in the United States” include slapping a fee onto wired remittances to Mexico to fund a southern wall?

    Liked by 1 person

  13. Rick says:

    How long before the Democrats demand changes to allow Congressional oversight or the ability to fire the head?

    Liked by 1 person

  14. Let me share my Dodd-Frank story with you. I am attempting to buy and re-start a steel mill. I have 10mm in cash, and need 30mm more. My land, buildings and equipment are worth 40mm before upgrades. I have been seeking capital for my well collateralized and if-conforming to the business plan and current US market a massively profitable project in 2017. Enter Dodd-Frank:

    Under this POS law it is ILLEGAL for a federally insured bank to lend me ONE SINGLE DOLLAR on all that collateral because this mill is a re-start from idle (not shut down). Therefore it’s marked as a “Start up” (which it isn’t) and cannot legally obtain bank financing!

    Now think of this on a few levels-
    Home: 1) It employs up to 500 people in it’s home town. 2) The average income of a steel worker at this plant is $91,000/yr. Ergo Dodd-Frank is killing our town.

    Nationally: Dodd-Frank protects “established” (read: big) businesses by eliminating competition from new businesses. Put another way Steve Jobs could not have built Apple under Dodd-Frank. Only IBM could have gotten financing. Imagine ALL the opportunities out there that cannot get off the ground because of this “Wreck America First” evil. Gee thanks Dumbocraps!

    Internationally: America is shoved onto the back bench as China and the Far East makes most American consumed goods now. We send them our wealth, and we get back crappy cheap bobbles. This is HORRIBLE!

    I can make American steel, hire American workers, prosper and American town and thrive in spite of the weaponized EPA and the USW Union right here in America- but I can’t legally borrow American money.

    Dodd-Frank is evil in more ways than you can imagine- and it’s making US broke!

    Liked by 6 people

    • RickA says:

      massivedeplorable’s “Wreck American First”: Yes. Accurate 1000%. Cloward & Piven strategy at work…..

      My manufacturing business builds made in US protective products, purely defensive in nature. Yet our latest, most popular, and highest protective model requires an export license issued by the US Department of State to legally leave the US (complying with the International Traffic on Arms Regulations – ITAR). Takes two to three months to have a license approved, denied or discovered sitting in limbo awaiting a solution to a multitude of possible bureaucratic delays, long after the foreign end-user buying agency fills out the required paperwork that we must submit (and pay $2850 per year to the State Department for the privilege of being registered to play this game).

      Selling nations with possible human rights violations receiving a license is a crap shoot. The end result is US and EU made products are known as having a much longer lead time to purchase and receive (or not). Foreign buyers that have already experienced these delays and uncertainty simply buy similar less expensive (but not as high quality) competitive products from other nations – typically China, Russia, India or Israel.

      The US loses exports and jobs racking up huge trade imbalances. Bureaucrats and politicians “feel good” that US goods are not involved in any potential human rights violations. And inside the beltway “pay to play” politicians, lobbyists and law firms extract millions from international corporations navigating and smoothing the process of obtaining export licenses (i.e. Uranium One).

      Liked by 1 person

    • POP says:

      Amazing story.
      More so, because in the rest of the English speaking world (UK,Canada,Australia,NZ) banks can lend to whomever they want as long as their capital adequacy ratios are maintained.

      Like

  15. Benson II says:

    The most clearly organized and plain explanation of the banking situation and how the government (Democrats) have subverted it to Federal government oversight and control I’ve ever read. Thanks CTH for helping readers to understand the inner workings of what’s happening. Who would have thought financial matters at the highest level could be interesting or understandable.

    Liked by 1 person

  16. jameswlee2014 says:

    Elizabeth Warren is a couple of feathers short of a warbonnet.

    Liked by 1 person

  17. dianeax says:

    This is incredibly delicious. Instead of moving in the direction of eliminating the CFPB, POTUS is using it to tease the very people who created it.

    I know Candidate Trump indicated he was in favor of reinstating Glass-Steagall, and I believe insisted that be added to the RNC platform in 2016. Does anyone have any updates on that?

    Like

  18. H.R. says:

    Regional bank stocks haven’t moved much yet, so I bought some stock in some of the regional banks this morning.

    I’m a buy-and-hold guy and they are paying a good dividend, so I’ll just wait and see if I get some growth out of the stocks.

    (That’s not investment advice. It’s what I personally did. Talk to a professional if you want investment advice. Don’t listen to ‘some guy’ on the internet, who just might be a dog, ya know?)

    Like

  19. iwasthere says:

    So the goal is to create a glass-stegal for smaller banks, and then allow them room in a de-regulated environment to grow and prosper. Sounds smart. And that would never get past the big bank lobby firewall in congress.

    Like

  20. Ditch Mitch says:

    Dims are such elitists they create these positions with nearly dictatorial powers thinking they will be the only ones to rule. Think NoCare and the HHS. PDJT is now dismantling NoCare using the powers of the Sec. HHS (now that Price is gone).

    A strategy I see the Trump Administration propose (even use) is divide and create parallel systems. SD touched on this here and has brought it up before.

    NoCare is a great example of this approach. Give the people two choices in health care. “public” and private. Public will be lower cost, fewer options (compare with HMO) and eventually merged with medicare. Private has higher costs, more options (PPO). This would result in everyone who wants health care gets it.

    Watch and see as Mulvaney uses this strategy to dismantle the banking monopolies using the office CFPB.

    Like

  21. jeans2nd says:

    And…the lawyers come out.

    There’s a Hitch in Trump’s Plan to Stick Mick Mulvaney on the CFPB: It’s Illegal
    https://theintercept.com/2017/11/21/cfpb-director-richard-cordray-mick-mulvaney-trump/

    Prob is, it is not really illegal. The deputy dir is to assume dir by statute, according to the article. But the current deputy dir is only a temp, and has never been confirmed. Have not checked this out so author may be incorrect.

    Enter the law profs – from Georgetown!!! show proper obescience, peon.
    Except – first they must must someone w/proper standing. Oh darn.

    One wonders just how stoopid these “lawmakers” are. Thought lobbyists wrote these laws? This is the best they can do?
    Here’s a law for them, easy to follow – leave me and my wallet alone.
    Pocahontas must getting swamped by all the new probs Pres Trump keeps throwing out as bait.
    Is it possible to drown a Swamp Creature?

    Like

  22. Eileen Wright says:

    Click the link below to read the thread

    https://threadreaderapp.com/thread/935711093338468352

    Like

  23. old farta says:

    Pocahontas or Fauxcahontas, is does not matter. When 60 million vagina heads vote for the most crooked person of the century, we are in trouble.,

    Like

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