The Patriot Post® · Clarence Thomas Saves the CFPB
In 2010, in the wake of the financial crisis of 2008, the Democrats who controlled all of Washington passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. It was sold as a plan to make sure “too big to fail” never happened again, but, as usual, it really only empowered Washington bureaucrats to sink their claws deeper into the economy.
One of the new things Dodd-Frank established was the Consumer Financial Protection Bureau (CFPB), which has the authority to do things that have little to do with protecting customers or their finances. Congress also did what it has increasingly done in recent decades — designed a law so as to avoid its own accountability for how things play out. Members of Congress have decided life is far easier when they can campaign for or against something the executive or judiciary did than face accountability for the ways laws are written.
This cedes constitutional authority from the first branch among equals for crass political gain.
That’s the overarching takeaway here. But the particulars prove the point.
A 7-2 majority said that the CFPB’s funding structure isn’t a problem, overturning the Fifth Circuit Court with the ruling. A group of payday lenders (perhaps not the most sympathetic plaintiffs) argued that the CFPB’s funding structure — which allows it to draw from the Federal Reserve outside the normal appropriations process — violates the Constitution, which says, “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”
The majority disagreed. “The Bureau’s funding mechanism does not violate the appropriations clause,” Justice Clarence Thomas wrote for the majority. “Specifying the source and purpose [of funds for an agency] is all the control the Appropriations Clause requires.” Chief Justice John Roberts and Justices Amy Coney Barrett, Ketanji Brown Jackson, Elena Kagan, Brett Kavanaugh, and Sonia Sotomayor joined him.
Justice Samuel Alito wrote a dissent for himself and Neil Gorsuch that explains some big problems. “Elements that are safe or tolerable in isolation may be unsafe when combined. In the case of the CFPB, the combination is deadly,” Alito said of the CFPB’s funding structure and its sprawling authority to effectively rewrite laws. “And it is likewise clear that this assemblage was no accident. Rather, it was carefully designed to give the Bureau maximum unaccountability.” Congress ceded authority.
“In the last several months alone, the Bureau has announced plans to effectuate not one, but three major changes in consumer protection law,” Alito added. “These may or may not be wise policies, but Congress did not specifically authorize any of them, and if the CFPB’s financing scheme is sustained, Congress cannot control or monitor the CFPB’s use of funds to implement such changes.”
In other words, the CFPB effectively operates without oversight. It can legislate, and Congress abdicated its power of the purse. The CFPB is the deep state, and congressional Democrats deliberately designed it that way. Now, it has the Supreme Court’s stamp of approval.
I’m reminded of Chief Justice Roberts’s contortions to save ObamaCare, though in that case, he did it by ruling that the law’s penalty was a tax — precisely the opposite of what congressional Democrats said it was. At least Thomas and his fellow justices allowed Congress the latitude to legislate in this case. In both cases, the justices argued that it’s not their job to save Congress from itself.
The irony in this case is that the legislature created an executive agency that can also legislate while being accountable to no one.
It seems the only thing that’s too big to fail is the CFPB.