The Right Opinion

CFPB Needs a Day in Court

By George Will · Nov. 18, 2012

WASHINGTON – There can be unseemly exposure of the mind as well as of the body, as the progressive mind is exposed in the Consumer Financial Protection Bureau, a creature of the labyrinthine Dodd-Frank legislation. Judicial dismantling of the CFPB would affirm the rule of law and Congress' constitutional role.

The CFPB’s director, Richard Cordray, was installed by one of Barack Obama’s spurious recess appointments made when the Senate was not in recess. Vitiating the Senate’s power to advise and consent to presidential appointments is congruent with the CFPB’s general lawlessness.

The CFPB nullifies Congress' power to use the power of the purse to control bureaucracies because its funding – “determined by the director” – comes not from congressional appropriations but from the Federal Reserve. Untethered from all three branches of government, unlike anything created since 1789, the CFPB is uniquely sovereign: The president appoints the director for a five-year term – he can stay indefinitely, if no successor is confirmed – and the director can be removed, but not for policy reasons.

One CFPB request for $94 million in Federal Reserve funds was made on a single sheet of paper. Its 2012 budget estimated $130 million for – this is the full explanation – “other services.” So it has been hiring promiscuously and paying its hires lavishly: As of three months ago, approximately 60 percent of its then 958 employees were making more than $100,000 a year. Five percent were making $200,000 or more. (A Cabinet secretary makes $199,700.)

The CFPB’s mission is to prevent practices it is empowered to “declare” are “unfair, deceptive, or abusive.” Law is supposed to give people due notice of what is proscribed or prescribed, and developed law does so concerning “unfair” and “deceptive” practices. Not so, “abusive.”

The term, Cordray concedes, is “a little bit of a puzzle.” An “abusive” practice may not be unfair or deceptive yet nonetheless may be illegal. It is illegal, the law says, if it “interferes with” a consumer’s ability to “understand” a financial product, or takes “unreasonable” advantage of a consumer’s lack of understanding, or exploits “the inability of the consumer to protect” his or her interests regarding a financial product. This fog of indeterminate liabilities is causing some banks to exit the consumer mortgage business.

C. Boyden Gray and Adam J. White, lawyers representing a community bank challenging the constitutionality of the CFPB’s “formation and operation,” note in The Weekly Standard: “By writing new law through case-by-case enforcement, and by asserting ‘exception authority’ to effectively rewrite statutes, the CFPB is substantially increasing bankers' compliance costs. The absence of clear, simple, up-front rules will force banks to hire ever more lawyers and regulatory compliance officers to keep up with changing laws – an outcome that inherently favors big banks over smaller ones.” This exacerbates the favoritism inherent in the substantial implicit subsidy Dodd-Frank confers on some banks by designating “systemically important financial institutions” that are “too big to fail.”

Even worse, say Gray and White (in their complaint for the community bank), Dodd-Frank “delegates effectively unbounded power to the CFPB, and couples that power with provisions insulating CFPB against meaningful checks” by the other branches of government. This nullifies the checks and balances of the system of separation of powers. Courts are too reluctant to restrict Congress' power to delegate quasi-legislative powers, but the CFPB is an especially gross violation of the Constitution’s Article I, Section 1: “All legislative powers herein granted shall be vested” in Congress. By creating a CFPB that floats above the Constitution’s tripartite design of government, Congress did not merely degrade itself, it injured all Americans.

Like the Independent Payment Advisory Board, Obamacare’s health care rationing panel, the CFPB embodies progressivism’s authoritarianism – removing much policymaking from elected representatives and entrusting it to unaccountable “experts” exercising an unfettered discretion incompatible with the rule of law. Similarly, when Obama allows states to waive work requirements that the 1996 welfare reform law explicitly made non-waivable, he evades the Constitution’s provision conferring a conditional presidential veto power – ignoring the law becomes preferable to a veto Congress can override. And the waivers make a mockery of the Constitution enjoining the president to “take care that the laws be faithfully executed.”

Philander Knox should be the Obama administration’s patron saint. When Theodore Roosevelt asked Attorney General Knox to concoct a defense for American behavior in acquiring the Panama Canal Zone, Knox replied: “Oh, Mr. President, do not let so great an achievement suffer from any taint of legality.”

© 2012, Washington Post Writers Group


Howard Last in Wyoming said:

Mr. Will how come no mention of dissolving the Creature from Jeykll Island? Under Article 1, Section 8, Clause 5 Congress is authorized to control currency. Which Section allows this power to be given away to an unelected board that meets in secret? Maybe you should tell our citizens to buy wheel barrels as you will need one to carry the Federal Reserve Notes needed to buy a loaf a bread. Did anyone say Weimar Republic?

Sunday, November 18, 2012 at 1:29 AM

George Rogers Clark in Ohio replied:

Amen, Howard. But, you know we never learn anything from history.

Monday, November 19, 2012 at 6:35 PM

Tod the tool guy in brooklyn ny said:

The CFPB=caustic financial poisonous bureau. Article 1 is being violated; unelected bureaucrats are a big problem in the cauldren of Socialistic dictates and fiats. Who will provide for the common defense of legal citizenry, from the spiderweb of social/neo-marxISMS in our bruised and battered Republic??? Good points Howard & Uncle George. The struggle continues for Truth, Justice, & the American Way of free markets and free people.OOh-freekin'-rah!!

Sunday, November 18, 2012 at 5:53 AM

d.w.hudson in Michigan said:

The members of the CFPB are now added to the list.

Sunday, November 18, 2012 at 6:43 AM

Wayne in Hinesville, GA said:

This is just another way for Odumbo to control every aspect of our lives. It started with Dodd-Frank and then Obamacare came along. It won't stop there either. He has already signed on to the UN's arms treaty. Hopefully, the Senate will come to its senses and reject this monstrosity. I don't hold out much hope with Harry Reid and the Demorats controlling the Senate. I am like Howard, the Federal Reserve is one of the biggest drains on our economy. Unless the House stands up to Odumbo and starts controlling the purse strings it will only get worse.

Sunday, November 18, 2012 at 6:43 AM

Gregory in Yakima said:

George Will Says "The CFPB's director, Richard Cordray, was installed by one of Barack Obama's spurious recess appointments made when the Senate was not in recess. Vitiating the Senate's power to advise and consent to presidential appointments is congruent with the CFPB's general lawlessness."

Recess appointments made by President George W. Bush. These are only a few of Bush "spurious" recess appointments. Not a peep of protest from George Will about these and dozens more. Notice John Bolten was the 106th recess appt. There were many more as this partial list reveals.

But Will knows the sheep don't fact check so he goes on for days with this b.s.

The following relates to recess appointments made by President George W. Bush.

A. Paul Anderson to be a Federal Maritime Commissioner August 22, 2003. [1]
Michael J. Bartlett to be a Member of the National Labor Relations Board January 22, 2002. [2]
Warren Bell to the board of the Corporation for Public Broadcasting in December 2006. [3]
Andrew G. Biggs was named to be Deputy Director of the Social Security Administration April 4, 2007.
John R. Bolton as U.N. Ambassador in August 2005, after having been blocked by the Senate. Bolton was Bush's 106th recess appointment. (FSRN 1 Aug '05)
William B. Cowen to be a Member of the National Labor Relations Board January 22, 2002. [4]
Susan E. Dudley to be Director of the Office of Information and Regulatory Affairs (OIRA) in the U.S. Office of Management and Budget on April 4, 2007.
Eric S. Edelman as undersecretary of defense for policy to replace Douglas Feith in the No. 3 position in the Pentagon. "Democrats on the Senate Armed Services Committee led by Carl Levin of Michigan, their ranking member, stalled Edelman's nomination to force the release of documents related to a specialized intelligence unit Feith set up before the conflict." [5]
Tracy A. Henke to be Executive Director of the Office of State and Local Government Coordination and Preparedness at the Department of Homeland Security. [13]

Sunday, November 18, 2012 at 11:22 AM

CA Conservative in Red Dot, Blue State replied:

Greg, You missed Will's cavet, "...when the Senate was NOT in recess." Yes Bush, as most other POTUS's, made numerous recess appointments, when the SENATE WAS IN RECESS.. This angered the Dem's so they started employing the "pro-forma session" tactic and according to Henry B. Hogue for the Congressional Research service, "The Senate pro forma session practice appears to have achieved its stated intent: President Bush made no recess appointments between the initial pro forma sessions in November 2007 and the end of his presidency."
I appears that it is you, Gregory, that was counting on no one fact checking your "facts."

Sunday, November 18, 2012 at 12:13 PM

billy396 in ohio replied:

CA, you took the words right out of my mouth. Once OBAMA and his Demonrats passed the "pro-forma session" tactic, George W. Bush complied with the law. Now that Obozo is in office, he rides rough-shod over the very law that he pushed for, as well as the Constiution, federal bankruptcy laws, etc., etc. These idiot lemmings never bother to check the facts on ANYTHING.

Monday, November 19, 2012 at 10:02 AM

Gregory in Yakima said:

From the Federalist Papers by Alexander Hamilton "In Federalist No. 67, Alexander Hamilton wrote[3]:

"The ordinary power of appointment is confined to the President and Senate jointly, and can therefore only be exercised during the session of the Senate; but as it would have been improper to oblige this body to be continually in session for the appointment of officers and as vacancies might happen in their recess, which it might be necessary for the public service to fill without delay"

Illegal? No :"Following the 2003 intrasession appointment of William H. Pryor, Jr. to the United States Court of Appeals for the Eleventh Circuit, a small number of criminal defendants whose appeals were denied by panels including Pryor appealed on the basis that Pryor's appointment was invalid. The Eleventh Circuit, in an en banc decision in Evans v. Stephens[4][5] held that the Constitution permitted both intrasession recess appointments and recess appointments to fill vacancies that "happened" prior to, rather than during, the congressional recess."

Sunday, November 18, 2012 at 12:12 PM

CA Conservative in Red Dot, Blue State replied:

Greg, Again the question is not whether or not recess appointments are costitutional but whether they can be employed when the SENATE IS IN SESSION.' Stop the obfuscation, Gregory.

Sunday, November 18, 2012 at 12:16 PM

Gregory in Yakima said:

This last bit makes me chuckle. Straining at a gnat after you've swallowed the camel. "According to the Congressional Research Service, President Bill Clinton made 139 recess appointments. President George W. Bush made 171 recess appointments, and as of January 5, 2012, President Barack Obama had made 32 recess appointments.[7]"

Why do you kids continue to allow the George Will's of the world to play you like puppets? You should learn to question, research and think. That way when someone like Will tries to peddle bad fish you can call him on it instead of setting your hair afire. Don't you get tired of all that needless drama?

Sunday, November 18, 2012 at 12:17 PM

Gregory in Yakima said:

So the recess process has been used to thwart Presidential discretion on appointments. Asserting Presidential authority is the proper recourse. Disputes over which side has legal authority is up to the court. Republicans may squeal and want you to believe they and the constitution are victims but that is hardly the case.

"Over what would have traditionally been the 2011–2012 winter recess of the 112th Congress, the House of Representatives did not assent to recess, specifically to block Richard Cordray's appointment as Director of the Consumer Financial Protection Bureau.[31] As therefore required by the Constitution, both the House and Senate held pro forma sessions.[32] Regardless, on January 4, 2012, President Obama claimed authority to appoint Richard Cordray and others under the Recess Appointments Clause. White House Counsel Kathryn Ruemmler asserted that the appointments were valid, because the pro forma sessions were designed to, "through form, render a constitutional power of the executive obsolete," and that the Senate was for all intents and purposes recessed.[33] Republicans in the Senate disputed.....

On January 6, 2012, the Department of Justice Office of Legal Counsel issued an opinion regarding recess appointments and pro forma sessions, claiming that "[t]he convening of periodic pro forma sessions in which no business is to be conducted does not have the legal effect of interrupting an intrasession recess otherwise long enough to qualify as a "Recess of the Senate" under the Recess Appointments Clause. In this context, the President therefore has discretion to conclude that the Senate is unavailable to perform its advise-and-consent function and to exercise his power to make recess appointments." [37][38] However, this was widely disputed,[39][40] with Professor Richard Epstein writing "... it is for the Senate and not for the President to determine whether the Senate is in session. The usual view in all cases is that the internal rules of each institution govern its operations, and for the President to say that the Senate is not in session when the Senate says that it is, introduces a set of constitutional confrontations that we would be far better off doing without."

Sunday, November 18, 2012 at 12:29 PM

CA Conservative in Red Dot, Blue State replied:

Greg, Thanks for making our point as to the omnipotency of this president. He concludes a Senate in session is not "available" so he makes a recess appointment. Then His Counsel determines that is constitutional and then then His DOJ concludes it is constitutional. My, my, my, a very tidy package indeed.

Sunday, November 18, 2012 at 12:41 PM

billy396 in ohio replied:

Yes, Gregory, you fool "the pro forma sessions were designed to, "through form, render a constitutional power of the executive obsolete"", BY the DemonRats so that they could stop Bush from appointing anyone that they didn't like (after that point, he abided by that law). Once Obozo came into power, that law (and many others) became inconvenient. You are indeed a Commie at heart if you can't see and admit to the facts. You want to refer to the Federalist Papers? Just about every single corrupt move that Obozo has made is exposed as fraudulent and unconstitutional in the Federalist Papers, which also include the definition of "natural-born citizen": a person with TWO parents who are BOTH American citizens.

Monday, November 19, 2012 at 10:13 AM

Craig in CA replied:

Greg - didn't Congress pass a government financing bill during one of those "pro forma" sessions? While I agree that the bulk of them were done just to "keep the clock running", they were in fact able to conduct business at that time, with that specific example.

Monday, November 19, 2012 at 5:26 PM

HP in Kalispell, MT said:

Gregory is on his game as usual. Alinsky calls for obfuscation so he obfuscates. Or more likely he could only grasp the first sentence of the will essay.

The recess appointment is not the problem. The issue is another rogue government entity that is outside the oversight of Congress. But the unrecess appointment is the only part you can grasp to claim " Bush did it".

Just more drivel from our village idiot.

Sunday, November 18, 2012 at 2:14 PM

Tod the tool guy in brooklyn ny said:

When it crashes, they'll be blaming POTUS 43. How could anyone love Christ AND Karl Marx, simultaneously? Saul Alinsky was a homosexual and wrong on policy. Karl Marx was wrong. Milton Friedman is my hero!!!

Monday, November 19, 2012 at 3:49 AM

Tod the tool guy in brooklyn ny said:

Correction; John Maynard Keynes was the homo, and stil---wrong on policy.

Monday, November 19, 2012 at 3:51 AM

Robert A. Spain in Sumter,South Carolina said:

Howard Last in Wyoming brings up a point. Follow the money to find out who is in control. Andrew Jackson broke the "Federal Bank" by stopping their funding. The same remedy needs to be applied to the Federal Reserve. The Treasury Department would then print money at the direction of Congress as the Constitution requires. Federal Reserve notes would then be replaced by Treasury notes.The resulting bankruptcy of The Federal Reserve could help solve our debt problems unless they were deemed "too big to fail" and be bailed out. Of course funding for CFPB would not be forthcomeing after bankruptcy.

Monday, November 19, 2012 at 9:06 AM