Yahoo Finance 'I would have thought there’d be a revolution in the streets:' author Michael Lewis on Trump's dismantling of the CFPB
As the decade comes to a close, Michael Lewis, author of “The Big Short,” is taking a look back at bank regulation since the financial crisis of 2008.
“I thought there would be radical cultural change, like it would be not just some laws but attitudes toward — and on — Wall Street would change ... It is true that the banks are much better capitalized, it is true that they’re unlikely to reprise the same type of crisis ... Something different will happen, but it won’t be the big Wall Street banks taking risks with subprime mortgage loans,” Lewis told Yahoo Finance’s The Final Round.
The Consumer Financial Protection Bureau (CFPB) was created in 2011 in the aftermath of the financial crisis to protect consumers from fraud and predatory lenders. While bank regulators have always had jurisdiction over financial products from regulated banks, no agency existed for the sole purpose of monitoring financial products from non-banks.
Lewis had a positive outlook on the CFPB in the wake of the financial crisis, saying, “Briefly, I had a lot of hope for the Consumer Financial Protection Bureau. That institution, I think, is underrated in terms of its importance ... It’s really easy to prey on people, and you generally make more money giving them bad advice than good advice ... That border really needs to be policed,” he said.
The CFPB lost its footing after Trump was elected president and appointed Mick Mulvaney, who had previously said he wanted to destroy the agency. Mulvaney went on to fire all 25 members of the group’s board. The agency is now being run by Kathy Kraninger, Mulvaney’s former deputy at the Office of Management and Budget.
“The fact that the Trump administration can explicitly gut [the CFPB], say we’re just not gonna let it do its job ... I would have thought there’d be a revolution in the streets,” Lewis said.
Lewis’s latest book, “The Fifth Risk,” is now out in paperback.
Sara Dramer is an associate producer at Yahoo Finance. Follow her on Twitter @saradramer
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