President Trump’s administration is putting pressure on Congress to reshape consumer finance agency, as crafted by Sen. Elizabeth Warren, before it can be used as a tool for “tyranny.”
“The [Consumer Financial Protection] Bureau is far too powerful, with precious little oversight of its activities,” CFPB acting director Mick Mulvaney said in a Monday statement. “The power wielded by the Director of the Bureau could all too easily be used to harm consumers, destroy businesses, or arbitrarily remake American financial markets.”
A semi-annual report was released by Mulvaney to Congress on Monday. It detailed the CFPB’s work between April and September 2017, when Richard Cordray, an Obama appointee and current Ohio gubernatorial candidate, led the bureau.
“The structure and powers of this agency are not something the Founders and Framers would recognize,” Mulvaney said in a letter with the report. He went on to say that the CFPB seems tyrannical in that it appears to accumulate “legislative, executive, and judiciary, [powers] in the same hands, a quote by Mulvaney from James Madison’s “Federalist Number 47.” Such an accumulation of power “may justly be pronounced the very definition of tyranny,” Madison wrote.
Mulvaney related these details regarding the CFPB director’s role, according to the Dodd Frank Act definition. The CFPB director simultaneously fills roles: “as a one-man legislature empowered to write rules to bind parties in new ways; as an executive officer subject to limited control by the President; and as an appellate judge presiding over the Bureau’s in-house court-like adjudications.”
Conservative leaders have from its inception attacked the CFPB as unconstitutional. Besides the defined role of the director, a president cannot remove the director without significant cause accord to the Dodd-Frank Act.
So if Congress does not amend the structure, the Supreme Court may eventually hear a case about the constitutionality of the structure.
Mulvaney is challenging Congress to make four changes to the Dodd-Frank Act so that the CFPB is more accountable:
- Fund the Bureau through Congressional appropriations;
- Require legislative approval of major Bureau rules;
- Ensure the Director answers to the President in the exercise of executive authority; and
- Create an independent Inspector General for the Bureau.
Warren had this to say about Mulvaney’s efforts: “Since Mr. Mulvaney took control, he has ignored congressional mandates, turning the CFPB into the politicized rogue agency he accused it of being before.”
She also complained Mulvaney has systematically ignored the requirements of the bureau, including the collection of sensitive information from banks under examination.
Mulvaney countered: “Such continued frustration with the Bureau’s lack of accountability to any representative branch of government should be a warning sign that a lapse in democratic structure and republican principles has occurred. This cycle will repeat ad infinitum unless Congress acts to make it accountable to the American people.”
Trump appointed Mulvaney to serve as the director of the White House’s budget office and to lead the CFPB temporarily after Cordray resigned in November 2017. Trump has not yet nominated a new director.
Are you afraid of what Warren might do with this tool for “tyranny?”
Credit: Daily Caller