The article goes on to state the drawback here:On Wednesday we got a concrete sense of why, exactly, the banks fought so hard to kill the Consumer Financial Protection Bureau: because, among other things, this is an agency that can slap the banks with huge fines and force them to alter their business practices by legal fiat.
The CFPB's latent muscles finally ripped through its shirt when it ordered Capital One to:
refund approximately $140 million to two million customers and pay an additional $25 million penalty. This action results from a CFPB examination that identified deceptive marketing tactics used by Capital One's vendors to pressure or mislead consumers into paying for "add-on products" such as payment protection and credit monitoring when they activated their credit cards.
This was an important part of Dodd-Frank, which the GOP tried extremely hard to kill, via defunding and refusal to approve any nominees to the board resulting in some very underhanded recess appointments by Obama, that I believe may have ended up in the courts.The CFPB order shows why executive regulatory power is so scary to business: Because without any kind of trial and with no judge or jury, regulatory agencies can effectively convict companies of criminal behavior and mete out a sentence.
To be sure, this power is unnerving, but it's absolutely essential for policing malfeasance in the private sector, given the difficulties and expense of bringing criminal cases against corporations.
Which brings me to the bad news of the settlement: It's not clear that civil penalties like this are very effective at reducing corporate crime.
IMHO, Captial One is probably the sleaziest Credit Card Marketer since Providian (funny how they got busted for the same sleazy practices that Providian was tagged for, prior to their acquisition), and I definitely think this is a slam dunk for the CFPB.
$210m is probably a drop in the bucket for Capital One, but hopefully this is a good start.
Edit: Damn you AB!