Amazon Sizzles, Walmart Fizzles And The Knives Are Out For The CFPB

Amazon sizzled — along with the rest of eCommerce — while Walmart fizzled after Mr. Buffett threw them some public shade. And while that might normally be the fizzle of the week, pretty much nothing compares with the ongoing flogging the CFPB is taking at the hands of all three branches of government.

There’s little love in Washington these days, and if you’re a staffer at a certain regulatory agency on the Hill, then it may be time for fear and trembling. At the very least, it’s time to digitally dust off the resume and start LinkingIn. The fact remains that certain Republicans are taking aim at the watchdogs that dog the watched, from credit card companies to payday lenders and beyond.

There may be plenty of jobs to be found, however, at Amazon fulfillment ops, if current trends are any indication.




In newly reported segmentation, revenues from Amazon Prime, video services, digital music and audiobooks delivered $6.4 billion in 2016, up from $4.5 billion in the prior year. While not breaking down the contributors on a product or line item basis, the proof is in the pudding that Amazon, truly, is gaining scale and critical mass in its drive for customer stickiness.

Internet Of Things

Or, as well all know it, IoT for short. The concept and the reality got a big boost when Visa and IBM said this week that they would join up to foster payments and hardware combining to make any device (really) into a POS device.

Shopify Sales

Were up 86 percent in the fourth quarter. That accompanies a staggering 96 percent growth in amounts (goods) sold across the platform, and there’s a bit of mobile growth, to the tune of 69 percent, seen for that period, too. Sizzling traction for eCommerce, as if we needed further proof.




In this case, the Grand Old Plans of the party in power. As the new administration in Washington finds itself at the center of some controversy, Trump has yet to detail tax cuts or the massive infrastructure spending plan that had cheered businesses into the election and beyond.

UK Labor Drain Via Brexit

Reports are out showing firms and individual workers are mulling flight from the U.K. in the face of Brexit. That would hit the economy with a one-two punch in skilled labor losses and then the lack of businesses to fill positions and grow.


When Warren Buffett sells 90 percent of a holding, investors should ponder the reason, and in this case, Walmart got the boot from the famed Oracle of Omaha. Happy days might not be here again, perhaps, as the eCommerce war with Amazon heats up?


Fizzle Of The Week: CFPB

The team over at the Consumer Financial Protection Bureau is not having such a great week. Despite the occasion of Valentine’s Day, the last few days haven’t exactly been much of a lovefest for this federal agency. An ever-increasing number of the Republicans now in control of the government have made it quite clear they would like to see a significantly less autonomous and less powerful CFPB — on the basis, they contend, that its history is more about overreach than consumer protection.

And that, notably, is the warmer and fuzzier position. The harder-nosed version would like to see the CFPB abolished entirely.

The week wasn’t all destruction. The CFPB did get something of a lifeline from the courts as the week wound down, but at best, it comes as cold comfort in a rather fizzle-oriented week.

Rep. Jeb Hensarling Would Like To See The CFPB Weakened — A Lot

Rep. Jeb Hensarling (R-TX) is gearing up to introduce legislation that will tamp down the power of the CFPB, and as the chairman of the House Financial Services Committee in the current political climate, he may actually have the power to really make it happen.

A leaked memo by Hensarling, first reported by The New York Times earlier this week, details plans to change the leadership structure of the CFPB such that the president has the power to replace the director at any time.

The legislation would also limit the CFPB’s enforcement authority and ability to set rules and force the consumer complaint system to be sealed, instead of open to the public. The legislative changes would also restrict the CFPB’s ability to go after large publicly traded companies already under the regulatory oversight of the SEC and limit its enforcement tools against businesses alleged to have taken advantage of consumers through deceptive practices.

“This would substantially change the structure of the CFPB and greatly limits the scope of its authority,” said Hunter Wiggins, former principal deputy enforcement director at the Bureau, in the NYT report.

Democrats were unsurprisingly incensed. Sen. Sherrod Brown (D-OH), the ranking Democrat on the Senate Banking Committee, slammed Hensarling’s plan, telling NYT that Republicans are trying to make the CFPB ineffective.

“It took less than three weeks for House Republicans to show their hand on how they will renege on candidate Trump’s campaign promises to hold Wall Street accountable and help working Americans,” Brown said after reviewing the memo in the report.

Hensarling is a longstanding critic of the CFPB and has in the past called it a “rogue agency” created to be “insulated” from oversight on the part of the Congress, president and voters.

“The regulatory web spun by the CFPB can make every provider of financial services guilty until proven innocent, inviting selective enforcement and financial shakedowns,” he noted in a Wall Street Journal op-ed last week.

And while that might sound a bit harsh, it is actually the less hairline position of the CFPB up for grabs this week.

Senator Ted Cruz Just Wants It To Go Away

If Democrats thought they were mad about the Hensarling plan, we’re not sure what emoticons would accompany the twin bills introduced Tuesday (Feb. 14) by Sen. Ted Cruz and Rep. John Ratcliffe (both from Texas) in the House and Senate that would abolish the CFPB entirely by repealing Title X of the Dodd-Frank Wall Street Reform Act.

The move is justified, according to Cruz and Ratcliffe, since the CFPB does the exact opposite of what it was created to do.

“Don’t let the name fool you, the Consumer Financial Protection Bureau does little to protect consumers. During the Obama administration, the CFPB grew in power and magnitude without any accountability to Congress and the people, and I am encouraged by the actions President Trump has begun to take to roll back the harmful impacts of an out-of-control bureaucracy,” Cruz said.

“The legislation that Rep. Ratcliffe and I are introducing today gives Congress the opportunity to free consumers and small businesses from the CFPB’s regulatory blockades and financial activism, which stunt economic growth,” Cruz continued. “While there’s much more to do to scale back the harmful regulatory impositions of Dodd-Frank, this legislation takes a critical step in the right direction.”

This is not a totally new move for Cruz and Ratcliffe — two years ago, the duo introduced a bill that also would have abolished the CFPB. That time around, however, a sitting Democratic president made its passage a total impossibility. In 2017, Donald Trump is the sitting president, and Republicans are much more confident in their ability to roll back parts of Dodd-Frank, or perhaps dismantle it entirely.

“The past several years showed us precisely why massive swaths of federal regulations are never the right solution to help hard-working Americans. President Trump has made it clear he’ll join us in our fight to dismantle Dodd-Frank and finally offer some relief to the small business owners throughout Texas and across the country who’ve been hit hardest by its devastating impact,” Ratcliffe said.

“The CFPB’s lack of accountability to the American people was quickly evidenced when — contrary to its name — it ended up hurting many of the very folks it was intended to help,” Ratcliffe continued. “While Sen. Cruz and I have been sounding the alarm on the CFPB’s federal overreach for some time now, I’m optimistic at our renewed chances of advancing this effort with a willing partner in the White House.”

And while the legislative jousting on this will likely be quite spirited, the courts may end up deciding much of these issues anyway. And the courts were a slightly friendlier place for the CFPB this week.

The Judicial Lifeline

The ruling came down Thursday that a full panel of judges will decide whether the structure of the Consumer Financial Protection Bureau is constitutional. That ruling follows an October ruling by a three-judge panel of the U.S. Court of Appeals in Washington that determined the agency’s structure is unconstitutional. Specifically, the court found that the Bureau’s structure with a single director that does not serve at the will of the president is unconstitutional. The three-judge panel standing ruling is that the director of the CFPB must serve at the will of the president or that leadership of the organization must be transferred to a bipartisan panel of appointed members, similar to the governing structure of the SEC or FTC.

As currently structured, the Bureau is an independent institution run by a single director, Richard Cordray. He serves a five-year term and cannot be removed from power by the president without specific cause.

The October ruling came out of a lawsuit filed by mortgage servicer PHH filed in 2014 challenging the CFPB’s authority.

As of yesterday, the court granted the CFPB’s request for a review by a broader set of judges.

Oral arguments are scheduled for May 24.

“It gives us a much better shot at protecting the CFPB,” said Ed Mierzwinski, senior fellow at U.S. PIRG, a consumer advocacy group. “It’s a very significant step forward.”

“The court’s decision only creates further uncertainty regarding the constitutionality of the CFPB,” said Richard Hunt, president of the Consumer Bankers Association. “Congress and the administration must move immediately to address this concern on behalf of consumers.”

It does bear noting, however, that the White House has made it clear it will attempt to replace Cordray, no matter what the outcome of the court case is. And it seems likely that the legislature will be backing the White House up in those efforts — though exactly in how stern a fashion remains to be seen.

But what is clear is that it was not a very good week for the CFPB — and certainly one that earned it the “top” fizzling prize.


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