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A host of left-wing groups met with top regulators in the aftermath of the 2010 passage of the Dodd-Frank financial regulation legislation, raising concerns among some observers that the administration’s approach to those regulations could be colored by some of the left’s more radical elements.
The law creates five new regulatory agencies and “effects a profound increase in regulation of the financial services industry,” according to Harvard University legal scholars.
Regulators have held thousands of meetings with various stakeholders to discuss implementation of the law. While many of those meetings involved institutions that will be directly affected by the regulations—banks, corporations, and even foreign governments—some hosted groups that are explicitly ideological.
Many of those meetings involved the Consumer Financial Protection Bureau (CFPB), a new regulatory agency created by Dodd-Frank, and were hosted by Sen. Elizabeth Warren (D., Mass.), then a special assistant to the president and a staunch ally of left-wing financial regulation advocates.
Warren hosted more than 30 groups on Dec. 7, 2010 to discuss the CFPB. They included the Democracy Alliance, a shadowy network of left-wing activist groups that use dark money to affect public policy. Warren was elected to the U.S. Senate as a Massachusetts Democrat after it became clear that she would not be confirmed as CFPB chief.
Left-wing foundations such as the Rockefeller Family Fund and the Pew Charitable Trusts also attended the meeting. “Consumer advocates,” who push for greater government regulation of virtually every area of the economy, were in attendance, as were representatives of the Service Employees International Union (SEIU) and activist group MoveOn.org.
The possibility that these groups wielded significant influence over the creation and operation of the CFPB has some observers concerned.
“That these anti-capitalist agendas are influencing the CFPB is especially troubling, because the CFPB lacks any form of accountability to American voters through Congress,” John Berlau, senior fellow for finance and access to capital at the Competitive Enterprise Institute, told the Washington Free Beacon in an email.
“Unlike most agencies of its size and scope, the CFPB does not get its funding from Congress,” Berlau said. “It is instead funded by the Federal Reserve, an entity with its own problem of lack of transparency and accountability.”
The Sunlight Foundation, which promotes government transparency, compiled an exhaustive, searchable list of all Dodd-Frank meetings held by major federal regulatory agencies. The meeting with Warren was one of hundreds held in the wake of Dodd-Frank’s passage.
Many of the policies pushed by the groups in these meetings could be economically destructive, said Berlau.
“Many of these groups are pushing expansion of the same policies that got us into the financial crisis: massive government housing subsidies through Fannie and Freddie and mandates that banks make loans to non-creditworthy borrowers,” Berlau said.
Left-wing groups with well-documented ties to the White House and the Obama administration met with top regulators to discuss federal housing policies some blame for inflating the pre-2008 housing bubble.
John Podesta, Obama’s former transition chief and president of the left-wing Center for American Progress, attended a Dec.15, 2010, meeting with Treasury Secretary Tim Geithner and Jared Bernstein, the chief economic adviser to the vice president, on government-sponsored financial insurers such as Fannie Mae and Freddie Mac.
The Center for American Progress released a report the following month on federal housing finance reforms that praised Dodd-Frank’s passage and made recommendations on the implementation of major housing regulations that allow easier access to home mortgages.
The SEIU also attended the Dec. 15 meeting with Geithner and Bernstein, one of at least eight meetings between the union and top Obama administration officials.
The SEIU released a report that same day bemoaning bonuses for executives of major banks. National People’s Action and the PICO National Network contributed to that report. Those two organizations attended four different meetings with Warren and a host of other leftist groups regarding the CFPB, which was praised in their report with SEIU.
“The problem is these agencies are frequently meeting with both big business lobbyists and these proponents of big government, but are not seeking out the viewpoint of the small entrepreneurs who create most of the jobs yet are frequently the ones most victimized by government regulations,” Berlau said.
A recent report by the Florida Chamber of Commerce Foundation found that Dodd-Frank would significantly hike regulatory compliance costs for small and community banks.