Did Democrats put ACORN in charge of regulation for financial institutions?
posted at 9:00 am on October 24, 2009 by Ed Morrissey
From the pages of Government Doesn’t Listen, Part MMXLVII, we have this stunning example from the House Financial Services Committee. Yesterday, Reps. Maxine Waters, Barney Frank, and the rest of the Democrats decided to grant community organizers governing powers by giving them a role in shaping and enforcing new regulations on the American financial industry. That seems to include, although not explicitly, ACORN:
During consideration of H.R. 3126, legislation to establish a Consumer Financial Protection Agency (CFPA), Democrats on the House Financial Services Committee voted to pass an amendment offered by Rep. Maxine Waters (D-CA) that will make ACORN eligible to play a role in setting regulations for financial institutions.
The Waters amendment adds to the CFPA Oversight Board 5 representatives from the fields of “consumer protection, fair lending and civil rights, representatives of depository institutions that primarily serve underserved communities, or representatives of communities that have been significantly impacted by higher-priced mortgages” to join Federal banking regulators in advising the Director on the consistency of proposed regulations, and strategies and policies that the Director should undertake to enforce its rules.
By making representatives of ACORN and other consumer activist organizations eligible to serve on the Oversight Board, the amendment creates a potentially enormous government sanctioned conflict of interest. ACORN-type organizations will have an advisory role on regulating the very financial institutions from which they receive millions of dollars annually in direct corporate contributions and benefit from other financial partnerships and arrangements. These are the same organizations that pressured banks to make subprime mortgage loans and thus bear a major responsibility for the collapse of the housing market.
Parsing this carefully, it does not appear that Democrats on the HFSC explicitly included ACORN on this panel. Instead, the Waters amendment leaves spots open for representatives from organizations like ACORN, and probably does nothing to exclude ACORN representatives for consideration on these slots. The headline and lead on this release seem to be somewhat misleading in stating that Waters explicitly added ACORN as a regulator.
However, that doesn’t make the amendment any better. It would not matter whether these institutions were holier than the Church, more all-American than the Boy Scouts, more trustworthy than the Marines, and better looking than Hannah Giles. Regulation should be precise and enforced by the government, not made up as a board makes up arbitrary strategies as it goes along. As the article points out, these groups will have conflicts of interest with some or all of these financial institutions, which makes their inclusion even more odd.
Congress has a duty to pass rational regulation that can be precisely and consistently enforced without “strategies” and agendas, or better yet, just provide resources to enforce the regulation we already have.