The U.S. Court of Appeals for the D.C. Circuit on Tuesday ruled the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional. CFPB, a keystone of the controversial Dodd-Frank financial reform law, features a single director who wields enormous legal power but cannot be removed from office without “cause” by the president. Congress, too, is largely powerless, as the Dodd-Frank legislation prohibits Congress from exercising any budgetary oversight.
In the 110-page decision, Judge Brett Kavanaugh wrote: “In short, when measured in terms of unilateral power, the director of the CFPB is the single most powerful official in the entire U.S. government, other than the president. Indeed, within his jurisdiction, the director of the CFPB can be considered even more powerful than the president.”
The following statements from finance regulation experts at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Director of Communications Jim Lakely at [email protected] and 312/377-4000 or (cell) 312/731-9364.
“The Consumer Financial Protection Bureau’s defeat at the U.S. Court of Appeals for the D.C. Circuit is a victory for consumers. Judges ruled the agency’s structure is unconstitutional, because it has only a single director instead of a board of directors. This unilateral authority caused CFPB to believe it was more important and powerful than other government agencies, a ruler above rulers. Today’s Court of Appeals ruling proved that conceit to be false.
“CFPB will now be more accountable to the other branches of government, as our nation’s founders intended, because judges ruled the president does have the power to rein in and fire CFPB’s director, just as the president has the power to do with other executive-branch agencies.
“CFPB, created by lawmakers in a fit of panic called the Dodd-Frank Wall Street Reform and Consumer Protection Act, has run amok for years, claiming to be above checks and balances. Lawmakers should continue efforts to rein in the regulators gone wild at CFPB, and ultimately dissolve the agency, as it lacks a purpose, harming consumers by increasing the costs and difficulty of financial transactions for millions of everyday Americans.”
“The DC Circuit’s ruling is doubly good. It works to restore constitutional checks and balances, while it potentially gives the economy a boost by weakening a regulatory agency that has contributed importantly to reduced capital formation and economic growth.”
The Heartland Institute is a 32-year-old national nonprofit organization headquartered in Arlington Heights, Illinois. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.