Appeals court finds CFPB funding unconstitutional

A three-judge panel of the 5th U.S. Circuit Court of Appeals ruled in a case brought by a payday lending group against the CFPB's 2017 payday lending rule.

 

By Katy O'Donnel 10/19/2022 

An appeals court on Wednesday ruled that the Consumer Financial Protection Bureau’s funding mechanism is unconstitutional, in a victory for lenders that have targeted the agency’s structure in a years-long bid to tamp down regulation.

A three-judge panel of the 5th U.S. Circuit Court of Appeals ruled that the design of the CFPB violated the Constitution because it receives funding through the Federal Reserve, rather than appropriations legislation passed by Congress. Democrats established the structure when they created the CFPB in the 2010 Dodd-Frank law as a way to shield the bureau from political pressures that could impact its oversight of the finance industry............“Congress’s decision to abdicate its appropriations power under the Constitution, i.e., to cede its power of the purse to the Bureau, violates the Constitution’s structural separation of powers,” the judges wrote...........The Supreme Court in 2020 ruled that another provision of the agency’s structure — a single director who could only be fired for cause, rather than at will, by the president — violated the Constitution’s separation of powers............To Read More....

Consumer Financial Protection Gone Awry

By Star Parker April 13, 2022 

The crises of recent years tend to erase from memory those that preceded them. One, as you may recall, was the financial collapse of 2008 -- a collapse deemed by many as the worst since the Great Depression. That collapse swept into power a government like the one we have now -- the White House and both houses of Congress controlled by Democrats...............Indeed, the new Democrat administration followed this advice and used the financial crisis as an opportunity for a major expansion of government.

Democrats wasted no time to ascribe the financial collapse to business greed and insufficient regulation of banks and other financial institutions. In 2010, the 2,300-page Dodd-Frank Act was passed -- with no Republican votes in the House and three in the Senate -- adding 400 new regulations on financial institutions. Included in this tsunami of new financial regulation was the creation of a new independent agency -- the Consumer Financial Protection Bureau............ Now our financial institutions -- banks, securities firms, credit unions, payday lenders, etc. -- fall under the purview of the Consumer Financial Protection Bureau and must submit to its scrutiny and oversight.

The CFPB has just announced sweeping new changes in its "supervisory operations to better protect families and communities from illegal discrimination"  Firms must make available to CFPB "their processes for assessing risks and discriminatory outcomes, including documentation of customer demographics and the impact of products and fees on different demographic groups."...........Can a government bureaucrat really determine why a banker did or did not make a loan, and should the heavy hand of government be involved here?..............By 2008, according to Wallison, just before everything collapsed, "More than a majority of all mortgages in the U.S. financial system was sub-prime, required low or no down payment, or were otherwise risky.".............Today, Democrats are back at it.

CFPB Director Rohit Chopra is gearing up to use his almost unilateral power to show he knows better than business and the marketplace what is good for consumers..........To Read More..

The Supreme Court Is Poised to Strike Down a Major Obama-Era Agency

The Consumer Financial Protection Bureau concentrates power in the hands of a single, unelected, unaccountable official.

By Ilya Shapiro October 21, 2019

Last week, the Supreme Court agreed to hear what could end up being the most consequential case of the term — in a year where the justices are already taking up employment discrimination, the Second Amendment, abortion, DACA, school choice, and other issues of higher political salience. In Seila Law LLC v. Consumer Financial Protection Bureau, the Court will decide the constitutionality of an agency long criticized not just by the business community and free-market-oriented politicians but also by constitutional scholars who see major problems with its structure as a single-director agency seemingly unaccountable to the president or anyone else..........To Read More.....

Richard Cordray is looking after his campaign, not consumers

by Jeff Joseph | Feb 26, 2018

After years atop the Consumer Financial Protection Bureau, Richard Cordray is busy courting liberal donors for his Ohio gubernatorial bid.

New filings show Cordray has raised $2 million since August — the highest mark among Ohio Democrats running for the May primary election. He has managed this by courting donors who either benefitted from the regulations he introduced in Washington, D.C. or who will benefit from his election. All you have to do is follow the money.

For years, the agency picked winners and losers through a bevy of financial regulations, benefitting certain industries at the expense of others. Since its inception, the CFPB has issued well over $5 billion in penalties, punishing a wide variety of companies in the name of “consumer protection.”

 For example, Cordray’s CFPB targeted prepaid card companies that charge overdraft fees — one way to stay afloat in a competitive industry — to presumably level the playing field for consumers. When it goes into effect next year, the agency’s “prepaid card rule” will slow down the sign-up process by giving customers a 30-day waiting period before agreeing to overdraft features……..To Read More…

CFPB: Trump targets a monster

By Monica Showalter November 26, 2017

President Trump has slammed the Consumer Financial Protection Bureau as a "total disaster" and rightly objects to a second leftist taking the place of outgoing leftwing director Richard Cordray. His battle is just the tip of the iceberg surrounding this federal agency that shouldn't even be there in the first place.   What Trump is battling is an unaccountable agency run by the Democrats and for the Democrats with the aim of funding more Democrats. It's a shakedown racket targeting banks and other moneybags businesses based solely on the size of their assets to harvest from fines. It was never about protecting consumers. It was never about oversight. It just amounted to a slush fund for Democrats that as set up cannot be reformed.

A long, worthy piece by a Ronald L. Rubin, a former enforcement attorney at CFPB, in National Review, lays out the problems as only an insider's account can.  

Conceived as a government watchdog with noble aims, the CFPB was doomed by a structure that made it an inherently political agency.

is how he summed this leftist racket up............... Then its creators designed the agency so that no Republican could ever enter it.............. Rubin describes how the agency systematically discriminated against Republican hires through wink and nod hiring processes and got away with it.............And that cash they extracted goes solely to Democrat groups............their activities are more political than charitable...........With a setup like this and no possibility of reform or a change of emphasis through elections, is there any reason to keep this agency around?............Throw the whole thing out........To Read More.....

• Trump, Dems in row over who is running the CFPB - fight over the appointment of an interim director at the Consumer Financial Protection Bureau.........

My Take - One thing the Democrats understand - and understanding the Republican elite fail to grasp or don't care - is the Deep State, or Swamp as it were, exists only because there a massive number of federal bureau, agencies and departments that keep them funded as bureaucrats. 

But, just as in the Roosevelt administration  - which created a massive federal bureaucracy filled with Soviet agents, socialists of one type or another and fellow travelers, and yes Joe McCarthy was right - all these government agencies are filled with leftists with the goal of overturning the U.S. Constitution and imposing a socialist state on the American people. 

All in collusion with those international socialists desiring to create socialist world government under the auspices of the United Nations.   The only fix to the Deep State is to eliminate most of the federal government.  Getting rid of the EPA, Wildlife Service, Bureau of Land Management and OSHA would be a good start. 

Here's a list of all the government agencies.  If no one has an objection - After the four I mentioned - start eliminating them alphabetically. 

Good Riddance to Finance Regulator Richard Cordray

John Berlau  Novermber 16, 2017 @ The Spectator
 

Rep. Ann Wagner (R-MO) may have had the best response to yesterday’s resignation announcement by Consumer Financial Protection Bureau Director Richard Cordray. The statement, sent to reporters and posted on her website consisted of just two words: “Good riddance.”
 

Wagner provided links to give some context, and no example shows Cordray’s general arrogance better than his answer to a basic question Wagner asked about CFPB spending and priorities. When she asked him in a hearing about the CFPB’s renovations of its new building that so far has cost $215 million, Cordray replied, “Why does that matter to you?”

The resignation of Cordray — appointed by President Obama to the CFPB first as a likely illegal “recess” appointment in 2012 and then confirmed for a five-year term in 2013, when then-Senate Majority Leader Harry Reid abolished the filibuster for nominees — is long overdue. The CFPB under Cordray’s tenure has failed consumers, as it has issued massively expensive regulations that have crushed Main Street banks and credit unions while ignoring the misdeeds at Wells Fargo even as state agencies were tackling it.

If Cordray had not resigned, or if for some reason he changes his mind, President Trump should not hesitate to fire him. I have argued repeatedly — including in an open letter to President Trump earlier this month — that there are many grounds to fire Cordray even under the strict conditions of Dodd-Frank. As I pointed out recently in The American Spectator, Cordray “has violated the due process right of the firms and individuals he regulates, approved excessive spending on renovations for the CFPB’s office building, and ignored Congressional subpoenas for information on the CFPB’s operations.”

Tellingly, even two staunch GOP critics of President Trump, Sens. Ben Sasse (R-NE) and Mike Lee (R-UT), still urged the president to fire Cordray.

And members of both parties have expressed concern about the harmful effects of the multitude of CFPB regulations on community banks and credit unions. A letter to Mr. Cordray from the Credit Union National Association and several state credit union associations called the CFPB’s regulatory approach “terribly troubling” and “baffling,” and noted that the cost of the regulatory burden on credit unions has increased from $4 billion in 2010 to $7 billion in 2014, due largely to CFPB red tape.

Cordray’s CFPB long escaped accountability because of the defective and unconstitutional structure of the CFPB. Congress and the courts must strengthen the CFPB’s accountability by making it subject to appropriations from Congress and giving the president the power to remove the director “at will,” as in the case of a Cabinet secretary.

President Trump must also immediately nominate and the Senate must swiftly confirm a new director who will begin the process of removing the red tape harming consumers and Main Street financial institutions and focusing the CFPB’s resources on combating genuine fraud and malfeasance. Consumers, entrepreneurs, small banks and credit unions need relief now from the CFPB’s stifling red tape.

CFPB Director Shows Contempt for Congress — President Trump Should Fire Him

Iain Murray

Add another one to the long list of reasons why President Trump should fire Richard Cordray, the Director of the Consumer Financial Protection Bureau. They include spending public money to create a palace for the Bureau, evidence of widespread discrimination against women and minority staffers, and the abuses of authority by the Director that were identified by a Federal Appeals Court in a recent case (which is currently being reheard).  The new reason is that House Financial Services Chairman Jeb Hensarling has identified “contumacy” on behalf of the Director in his refusal to answer a Congressional subpoena.

In a letter to the Director dated yesterday, Chairman Hensarling noted that over a year had passed since the Committee requested records from the Bureau to facilitate an investigation, and that a subpoena was issued on May 11 this year, to which no answer has been forthcoming.  The letter also put the Director on notice that any attempt to promulgate a rule on arbitration agreements (the subject of the Congressional investigation) before answering the subpoena would result in contempt proceedings.....To Read More.....

Appeals Court Rules CFPB Unconstitutional

CEI Applauds Ruling As Win for Limited Government

October 11, 2016

“This is a great day for limited government and the constitutional separation of powers,” said Competitive Enterprise Institute (CEI) General Counsel Sam Kazman, following a ruling in PHH Corp. v Consumer Financial Protection Bureau that found the CFPB to be unconstitutional.

The United States Court of Appeals for the District of Columbia found the CFPB’s structure to be unconstitutional. It invalidated the Dodd Frank provision that made its director removable only for cause, and ruled that in fact the President has authority to remove the CFPB director at will.

“Today’s ruling will play a major role in providing proper accountability for this rogue agency,” said Kazman. “It also opens the door for CEI’s district court case, State National Bank of Big Spring v. Lew, to move forward, challenging the constitutionality of other aspects of CFPB.”.....To Read More...