Friday, December 1, 2017

The Consumer Financial Protection Bureau Imbroglio Is Over the Future of America.

The Consumer Financial Protection Bureau (CFPB) Spat Is Over the Future of America Two claimants assert their right to be the interim director of the Consumer Financial Protection Bureau (CFPB). The initial impression is that of a slapstick comedy appropriate to the third world, not the United States. This impression is wrong. The dispute is not a battle of bureaucrats. Nor is it a fight over consumer protection. It is a debate over the future of our Republic. The issue is whether our elected officials or unelected bureaucrats will govern. Will government be responsive to the people or will it carry out the will of bureaucrats? The drafters of the Constitution gave us three separate, but equal branches of government: the executive, judicial, and legislative. They did not, and could not, foresee the rise of the administrative branch of government beginning with the New Deal. Agencies have multiplied at the federal, state, and local levels, increasingly regulating our business, professional, and personal lives with an ever expanding Nanny State in our lives. Agency powers have been escalating with favorable court decisions. They had the good will of the courts since the days of the New Deal. Courts generally defer to the agencies as long as they are acting within their jurisdiction and discretion. Some agencies, such as the Environmental Protection Agency, are within the Executive Branch, subject to control by the President. The others are independent commissions, such as the Securities Exchange Commission or National Labor Relations Board. The President appoints, subject to confirmation by the Senate, the administrators, commissioners, and directors of both forms of agencies. In addition, Congress has the power of the purse, controlling the appropriations and budgets of these agencies in addition to the statutory writ that governs the agencies. The leaders of the executive branch agencies, as with the cabinet officers, serve at the pleasure of the President. Conversely, the commissioners of the independent agencies serve the term of their office, not subject to termination by the President. The instinct and nature of administrative bureaucracies is to expand their jurisdiction and powers. They would become an independent fourth branch of government if they could. The CFPB is as close as we have come. It is the creation of Senator Elizabeth Warren, who stuck it into the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The first significant difference is that Congress does not control the CFPB’s budget. Their funding comes directly from the funds of the Federal Reserve Bank. The second critical difference is the issue in this case. The Director serves for 5 years, but the Deputy Director becomes the interim director “in the absence or unavailability of the Director,” also a contribution of Senator Warren. The agency is highly controversial with conservatives reviling it and its outgoing director Richard Cordray, an acolyte of Senator Warren. The agency has pushed its jurisdiction, attacked auto dealers when barred by Congress from doing so, and diverted some settlement funds to Democrat linked NGO’s. Director Cordray resigned, promoting Leandra English, his Chief of Staff, as Deputy Director, and thus interim director. President Trump, pursuant to the Federal Vacancies Reform Act of 1998, appointed Michael Mulvaney, the Director of the Office of Management and Budget, as the new interim director, creating a conflict. The Vacancies Act allows the President to fill a vacancy with an official previously confirmed by the Senate. Thus, two potentially conflicting options exist for filling the vacancy. The Justice Department issued an opinion upholding the power of the President to fill the position. The General Counsel of the CFPB also agreed, as did a Ninth Circuit decision last year. Ms. English was not deterred by these decisions. She rushed to Senator Warren and Senate Minority Leader Chuck Schumer for succor. She also relied on the Democrat’s favorite legal recourse, filing a lawsuit Sunday night seeking to enjoin the President. The judge held for the President Tuesday. Director Mulvaney has assumed control of the CFRB and will rein in the agency’s excesses. The power of the people, expressed through the ballot box, is safe for now.

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