DC Circuit Delivers a Blow for the Constitution
The court ruled the Consumer Financial Protection Bureau unconstitutional.
Despite persistent attempts by countless politicians to kill it, the Constitution is still alive and kicking. This was on full display this week in a significant decision by the DC Circuit Court of Appeals declaring the Consumer Financial Protection Bureau (CFPB) “unconstitutionally structured.”
CFPB isn’t quite sexy enough to make regular appearances on the evening news, but it’s been a bane on our constitutional separation of powers since its 2011 birth under the Dodd-Frank finance regulatory overhaul at the behest of now-Senator Elizabeth Warren. As usual with things named by Democrats, the Consumer Financial Protection Bureau does anything but protect consumers. In fact, “predatory” would be a more apt word for the title. Indeed, early last year we highlighted the bureau’s lavish expenditures, intrusive collection of Americans' financial data, and unaccountability to the public.
Additionally, since the bureau’s inception, Republicans lawmakers have challenged its very constitutionality. Under CFPB’s setup, the president appoints the bureau’s director for a five-year term, but the president can fire him or her only for cause, not for any other reason — including policy decisions. To give some context, independent agencies — regardless of what we think of them in principle — are generally governed by bipartisan commissions. And while executive agencies are headed by a single person, that person is accountable to the president, who can fire him or her at will. These setups avoid giving one unaccountable person exclusive authority over an agency. (Despite the president’s unilateral actions, he is ultimately accountable to the American people.)
Not so with CFPB. Unencumbered by accountability to a president or the checks and balance of a bipartisan commission, CFPB Director Richard Cordray has pretty much had free rein at the agency since his appointment in 2012.
Indeed, the court stated, “Because the CFPB is an independent agency headed by a single Director and not by a multimember commission, the Director of the CFPB possesses more unilateral authority … than any single commissioner or board member in any other independent agency in the U.S. Government. Indeed … 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.”
Of course, this wasn’t breaking news. Back in 2012, columnist George Will accurately and critically wrote, “Untethered from all three branches of government, unlike anything created since 1789, the CFPB is uniquely sovereign.”
But no more.
In a victory for the Constitution and the American people, the court ruled that the CFPB director will now be accountable to the president, thus ending Cordray’s unfettered five-year reign. While an even more welcome step would have been the elimination of the bureau entirely, curbing its power to align with constitutional principles is a win not to be ignored.
The court’s decision also reminds us of the importance of everyday Americans taking a stand for Liberty against an ever-encroaching government.
As the Daily Signal reports, “Banks, mortgage lenders, and other credit establishments have largely cowered before Cordray and his troops, agreeing to nine-figure settlements rather than engage in prolonged litigation.” One New Jersey mortgage company, however, took a stand after Cordray arbitrarily slammed the company with a $109 million fine. That company, PHH Corporation, was the plaintiff in this week’s lawsuit.
Not surprisingly, Senator Warren dismissed the ruling as a “technical tweak,” as if the difference between a monarchy and a constitutional republic is a mere technicality.
Thankfully, the court took our constitutionally protected liberties much more seriously and, at least this time, upheld them.