The housing crisis and subsequent financial crisis in 2008 was caused in large part by politicizing loan eligibility criteria, advancing social justice objectives over sound economics. Unfortunately, the Dodd-Frank law added even more politicization by creating the Consumer Financial Protection Bureau, which has raised costs and pushed many financial services beyond the reach of the consumers it purports to protect.

The agency was the brainchild of Elizabeth Warren and the top demand of the liberal advocacy groups funded, ironically, by the billionaire inventor of toxic subprime negative-amortization mortgages, Herb Sandler. It was designed to be the most powerful and unaccountable bureaucracy in the federal government. All power was concentrated in one director with a fixed five-year term and not subject to removal by the president. There was no budgetary oversight from Congress, with the agency funded by Federal Reserve profits, and no meaningful limits on what it could regulate.

Fifteen years later we can judge the Consumer Financial Protection Bureau by its results. The number of banks in America, according to the FDIC, has plummeted from 7,500 to 4,500, with regulatory compliance costs falling disproportionately on........

© Yuma Sun