As the Trump administration swiftly moves to bring back jobs to this country, one of the areas that the administration needs to give serious attention to is how this country makes credit available in communities, and the one-size fits all attitude that the Consumer Financial Protection Board has instituted in the country.
And it doesn’t help that this one-size fits all attitude comes from an agency that was set up to be an unaccountable 4th branch of government under the Obama Administration.
Since its inception, the CFPB has been controversial, and in this past year, it was ruled that the agency’s structure was unconstitutional, and literally, was a fiefdom lacking responsibility to anyone in government:
Because the CFPB is an independent agency headed by a single Director and not by a multi-member commission, the Director of the CFPB possesses more unilateral authority – that is, authority to take action on one’s own, subject to no check –than any single commissioner or board member in any other independent agency in the U.S. Government. Indeed, as we will explain, the Director enjoys more unilateral authority than any other officer in any of the three branches of the U.S. Government, other than the President.
At the same time, the Director of the CFPB possesses enormous power over American business, American consumers, and the overall U.S. economy. The Director unilaterally enforces 19 federal consumer protection statutes, covering everything from home finance to student loans to credit cards to banking practices. The Director alone decides what rules to issue; how to enforce, when to enforce, and against whom to enforce the law; and what sanctions and penalties to impose on violators of the law. (To be sure, judicial review serves as a constraint on illegal actions, but not on discretionary decisions within legal boundaries; therefore, subsequent judicial review of individual agency decisions has never been regarded as sufficient to excuse a structural separation of powers violation.)
That combination of power that is massive in scope, concentrated in a single person, and unaccountable to the President triggers the important constitutional question at issue in this case.
More unilateral authority than anyone in all of government other than the president. And added to that, the court notes that the law which set up the position is unaccountable to the President.
This is less than an agency gone rogue. This is a constitutional crisis, and thankfully the court recognized it, and has declared the bureau’s structure Unconstitutional. For there to actually be an unelected person second in power only to the President of the United States is an unfathomable travesty, and this should have been an action that had the country up in arms.
However, it was the Obama administration it happened under. So the media collectively went “meh.”
But with a new president in town, there’s a glimmer of hope that an out-of-control bureaucracy may have their reins yanked, and yanked hard. There’s every expectation that the new President will take a dim view of an untouchable agency with unelected bureaucrat as its head with power equal to or exceeding his own:
Within days of being sworn in, President Donald Trump has already pledged to cut business regulations by 75%. One way he is likely to fulfill that promise, at least in part, is by defanging a legacy of the 2008 financial crisis: the Consumer Financial Protection Bureau.
Republican leaders have long tried to check the CFPB, arguing that the agency is flawed, too powerful and not accountable to elected officials. Currently, the bureau is funded by the Federal Reserve, and therefore doesn’t report to elected leaders. Most recently, Senators Ben Sasse (R-NE) and Mike Lee (R-UT) called for replacing the director of the CFPB with a multi-member panel that can be controlled by Congress.
“Director [Richard] Cordray has vigorously supported the unconstitutional independence of the CFPB,” Lee said in an early January statement.”Considering the damage CFPB has done to credit unions and community banks, President Trump should act quickly to remove the director.”
There’s talk that it is likely that the new president will assert his authority over the CFPB and fire it’s unelected head. If this happens, there’s speculation that the CFPB head Richard Corday will likely sue to prevent it from happening. But, make no mistake, there is a growing sentiment that this is a battle worth fighting, and there’s a strong basis that should he fire Cordray, President Trump would completely be in the right:
Shortly before the election, a panel of the U.S. Court of Appeals for the D.C. Circuit concluded that the law limiting the president’s power to fire the director was unconstitutional. The court reasoned that, by creating an agency with vast powers and shielding it from oversight, Congress violated the Constitution’s provisions designed to defend against arbitrary decisions and the abuse of power. Since the election, the CFPB has sought a review of this decision by the entire court of appeals, contending that it “sets up what may be the most important separation-of-powers case in a generation.”
The new president may wonder whether he can fire Mr. Cordray before the courts issue a final judgment. The answer is yes, Trump could fire Mr. Cordray and order him to vacate his office.
Madison and Taft were right. The Congress that sought to force a president to retain a hostile cabinet was wrong, as were the Congress that enacted the independent-counsel statute and the Congress that created the CFPB. To say otherwise would permit legislators to create a permanent class of unelected, autonomous bureaucrats who may thwart a president’s agenda.
A law that shields an officer as formidable as the CFPB director can have no place in our constitutional scheme.
If ever there was an example in the Federal Bureaucracy that there are government employees in Washington who are out of control, the unaccountability of the CFPB is a prime example of what is wrong in government.
It’s time for President Trump to make it right – It’s time for him to return government to the people, rein in the Consumer Finance Protection Bureau, and fire Richard Cordray, the most powerful unelected person in the federal government.
It may not solve all the problems with the bureaucracy. But it’s a start.