In another enforcement action, the young Consumer Financial Protection Bureau is forcing Discover to refund $200 million to credit card customers due to deceptive marketing practices that tricked customers into signing up for services they didn’t realize would cost what they cost. Earlier this summer, the CFPB made Capital One refund $150 million to their customers for similar deceptive marketing.

One thing that occurs to me: If we’d had today’s CFPB in 2005 & 2006, they would’ve come down hard on the rampant fraudulent mortgage lending that was going on at the time, because that too was tricking millions of people into buying financial products using deceptive marketing. If we’d had the CFPB then, that would have put the brakes not only on the crazy mortgages, but on the deceptively-high rated junk derivatives Wall Street firms made out of those mortgages. It’s not necessary, I think, to give giant punitive fines to stop this behavior; if the CFPB consistently catches these companies and makes them refund the ill-earned money, it makes it more profitable for them to put their energy into making money through more honest pursuits, and that’s all we need.

Another thing occurs to me: Richard Cordray, head of the CFPB, was a recess appointment, and his term expires next year – the first year of the next Presidential term. Obama made a recess appointment specifically because Republicans opposed letting the CFPB have a director at all. It’s not that they opposed Richard Cordray specifically; they explicitly said they’d filibuster anyone nominated for the position. They’re committed to decentralizing and weakening the CFPB, if they can’t get it abolished altogether.

Remember what the Bush administration did to FEMA, and other government agencies they didn’t like or didn’t take seriously? At least those agencies had long enough histories that we could see their performance in those years as an aberration. But the CFPB will be just over two years old when Richard Cordray’s term expires. If Mitt Romney is president then, expect its reputation to be ruined before it really establishes itself, and before it has a long enough track record for people to see its real value.