The Hill reports that the Consumer Financial Protection Bureau (CFPB), Elizabeth Warren’s brainchild, is “under siege by all three branches of the government.” Congressional Republicans have long opposed the agency that was created when Democrats were in control, arguing that it has too much power and too little accountability. President Trump has likewise expressed his displeasure with Dodd-Frank–the massive financial reform legislation that created the CFPB–throughout the campaign and again after taking office.
CFPB receives independent funding from the Federal Reserve, which weakens Congressional oversight. Unlike other federal agencies, its director also cannot be removed at-will be the president. There must first be a finding of “inefficiency, neglect of duty, or malfeasance in office.”
An appeals court ruled this structure to be unconstitutional last October, but the ruling was recently vacated pending rehearing before the full D.C. Circuit Court of Appeals. Instead of waiting for the case to be heard on May 24, however, Congress should probably just scrap the failed experiment altogether, as companion bills from Sen. Ted Cruz and his Texas counterpart Rep. John Ratcliffe would do.
The extremely overpaid bureaucrats at the CFPB have been wreaking havoc since the agency was created. They worked with other agencies, in what is known as Operation Choke Point, to target lawful businesses in industries disliked by the previous administration. They’ve tried to wipe out the small-dollar loan industry and leave the poor and the unbanked without access to credit in the name of protecting them. It has attempted to undermine consumers with an anti-arbitration rule that would only benefit class action lawyers, and now it evens wants to weaken attorney-client privilege.
There are other legislative approaches out there that would reform, rather than abolish, the CFPB. To be sure, these could be big steps in the right direction as well. But the burden should be on the CFPB to first demonstrate how it has benefited consumers, and not just bureaucrats and special interests. If they can do so then maybe there’s something worthwhile to salvage with a major organizational overhaul. Otherwise, the CFPB should be thrown out with the rest of the last administration’s garbage.