The Consumer Financial Protection Bureau (CFPB) is under attack.
House Republicans have passed language that would significantly adjust the bureau’s structure as part of their bank reform bill.
The Trump administration’s banking reform language, although not as aggressive as that of the House, proposes revamping the bureau.
A lawsuit is pending in the Circuit Court of Appeals that could, if decided as it was in the lower court, fundamentally change the way the director of the CFPB is appointed, making him or her subject to removal at the president’s discretion.
This suit and others could also potentially lead to the total elimination of the CFPB or to a finding that many of its rules were promulgated in an unconstitutional manner.
{mosads}The CFPB is, to be kind, a controversial place.
It is also a very unusual bureau.
The CFPB was created when the Dodd-Frank bank bill was passed after the financial crisis of 2008 and 2009.
Dodd-Frank was passed in the Senate on what was essentially a party line vote during a time when the Democrats had a filibuster-proof majority. They had no need to facilitate Republican participation in the drafting of the bill.
In fact, the mark-up of the final bill occurred in a conference committee of the House and Senate Banking Committees, which started one afternoon and went through the night, ending at five in the morning with the final product.
No Republican amendments of any significance were allowed to pass. The CFPB was created during the marathon mark-up.
At the time some Republicans, including myself, noted that the CFPB as passed would be the most powerful and unanswerable agency in the history of the government.
It would make J. Edgar Hoover’s FBI look like child’s play when it came to a rogue agency.
It was, as constituted, uncontrollable by and unresponsive to elected leaders, specifically the president and the Congress, no matter their party.
As structured, the CFPB delivered on everything progressives saw as necessary to their purpose.
It would be able to direct its actions and wrath against any person or organization that its leadership deemed to not help the causes of the left. This was particularly important given the left’s instinctive antipathy towards the market economy and, specifically, bankers.
The CFPB was the ultimate force to further the purposes of the Occupy Wall Street movement, which so animates the left then and now.
This power of the CFPB was made operable because, for the first time in American government, the Congress created an agency whose leadership was not subject to review by the executive branch and whose funding was not subject to the oversight of the Congress.
The CFPB director was set up to serve a five-year term without any avenue of recall or control from the president.
Unlike other such agencies where the leadership can be terminated by the president — or where there is a board of oversight including members of both parties — the CFPB had one leader who was all-powerful and unaccountable.
In addition the CFPB funding did not come under Congressional control. Instead, it was funded from the Federal Reserve.
The Securities and Exchange Commission, Comptroller of the Currency and even the Supreme Court must come to the Congress to get their funding.
Article One of the Constitution places the power of the purse with the Congress for a reason. It is to make sure that people who are answerable to the people through elections have the ultimate say in how bureaucracy deals with the people. It is called “government by the people.”
The CFPB thus was brought forth during a midnight birthing as an illegitimate child of the progressive movement.
This movement has no problems with trampling on the rights and purpose of our historic ‘checks and balances’ constitutional form of government, if it is seen as giving them power.
Once created, the CFPB under its present director consolidated its already concentrated power.
It has limited the people it hires to do enforcement to those who are true believers in its progressive causes. It has stonewalled all attempts by Congress to gain even the most elementary information about its enforcement actions.
It has developed a police state-like approach in its treatment of those it deems targets. It has become the rogue bureau, just as was predicated at its inception.
The CFPB was the brainchild of Sen. Elizabeth Warren (D-Mass.), dating back to the days before she held elected office.
Warren, then a teacher at Harvard Law School, like so many elites believes without question that, because they are in the right, neither historic precedent nor prior rules should restrain their initiatives.
They pursue with singular vigor the use of the government to control the lives of those they see as lesser or malevolent, or both.
Now of course, whenever the structure of the CFPB is questioned, those who challenge it are tarred by the left and their media acolytes as undermining the self-proclaimed protections of consumers that the CFPB is suppose to defend.
This is truly a unique argument.
To paraphrase, its proponents assert that they need to destroy the protections of the constitution — and, in particular, its commitment to having government answerable to the people — in the name of protecting the people.
The arrogance of this position is only exceeded by the abuse of our constitutional system that the CFPB represents.
We can only hope that at least once, the various avenues of review and reform that are now being pursued overcome the regal intransience of Warren and her progressives handy-persons.
Only then will this bureau be steered back into the orbit of government by the people.
Judd Gregg (R) is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee, and as ranking member of the Senate Appropriations Foreign Operations subcommittee.
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