The GOP Is Picking An Unnecessary Fight On the CFPB When There Is An Easier Solution

The GOP Is Picking An Unnecessary Fight On the CFPB When There Is An Easier Solution

One of the many travesties imposed upon an unwilling nation by the Democrats and Obama is the Orwellian named Ministry of Plenty Consumer Finance Protection Bureau. This brainchild of Fauxcahontas, operates as a self-perpetuating, unaccountable shadow government with a wide ranging mandate to meddle in basically any financial transaction you may engage in from mortgage lending to investments to your personal checking account.

What makes the CFPB different from any other agency is that its decisions are made by a single director, in this case a failed Democrat apparatchik named Richard Cordray, and Cordray can’t be removed except for “inefficiency, neglect of duty or malfeasance.” This means absent a compelling case that Cordray can’t handle the job, he is totally bulletproof no matter what regulations he imposes on the economy. For instance, the CFPB’s own documents show that it deliberately manufactures data on minority lending in order to penalize lenders for not lending to minorities:

As internal documents obtained by the Financial Services Committee and accompanying this report reveal, the Bureau’s ECOA enforcement actions have been misguided and deceptive. The Bureau ignores, for instance, the lack of congressional intent to provide for disparate impact liability under ECOA, just as it ignores the fact that indirect auto finance companies are not always subject to ECOA and have a strong business justification defense.

In addition, memoranda reveal that senior Bureau officials understood and advised Director Richard Cordray on the weakness of their legal theory, including: (1) that the practice the Bureau publicly maintained caused discrimination – allowing auto dealers to charge retail interest rates to customers – may not even be recognized as actionable by the Supreme Court; (2) that it knew that the controversial statistical method the Bureau
employed to measure racial disparities is less accurate than other available methods and prone to significant error, including that for every 100 African-American applicants in a data set for which race was known, the Bureau’s proxy method could only identify roughly 19 of them as African-Americans; and (3) that the Bureau knew that factors other than discrimination were causing the racial disparities it observed, but refused to control for such factors in its statistical analysis.

In October, a federal appeals court, while slapping down CFPB overreach, also concluded that its structure was unconstitutional.

In a significant blow to the authority of the Consumer Financial Protection Bureau, a federal appeals court ruled on Tuesday that the agency’s structure was unconstitutional but offered a fairly simple remedy: Give the president the power to fire the agency’s director at will.

The highly anticipated ruling from a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit directly addressed a longstanding criticism of the consumer watchdog agency: that its structure improperly gives too much power and autonomy to a sole director.

Other independent federal agencies are typically headed by a commission, the court noted in its ruling. But the 2010 legislation that created the consumer bureau, the Dodd-Frank Act, gave the bureau’s director — who is now Richard Cordray, President Obama’s pick — an unusual degree of independence. Once nominated by the president and confirmed by the Senate, the director, who serves a five-year term, can be removed only for cause, defined as “inefficiency, neglect of duty or malfeasance.”

The appeals court panel, citing “the threat to individual liberty” posed by an independent agency with a leader with such unchecked power, struck down that structure.

The article goes on:

The Consumer Financial Protection Bureau is expected to appeal to the full circuit court, which tilts Democratic. Or, alternatively, the agency could directly ask the Supreme Court to review the case.

“The bureau respectfully disagrees with the court’s decision,” said a spokeswoman for the agency, Moira Vahey. “The bureau believes that Congress’s decision to make the director removable only for cause is consistent with Supreme Court precedent, and the bureau is considering options for seeking further review of the court’s decision.”

There is so much wrong here that you don’t know where to start. The decision to appeal this ruling should not rest with the agency. The decision should rest with the administration. The very fact that an agency can appeal a court decision on its own behalf should be a clue that something is really, really broken.

Now an effort is building to get Trump to fire Cordray. The idea being that a court has said he can be fired and Trump should do it.

Allies of President Donald Trump are building a legal case for ousting Richard Cordray, the director of the Consumer Finance Protection Bureau who one court called “the single most powerful official” in government after the president.

Cordray has long been in the cross hairs of free-market conservatives and lawyers, and now some are informally compiling a dossier that would give Trump cover to fire him, should he choose to do so, for “inefficiency, neglect of duty, or malfeasance.” Those are the only conditions under which the director can be removed.

Cordray’s supporters are itching for that fight. Firing him would ignite a political fuse that could cause more damage than it’s worth to his foes. Even some Trump advisers are ambivalent about the idea, saying it might be easier to live with Cordray until his term expires in July 2018.

“There has been talk of getting rid of Cordray, but I think they’re trying to figure out what they can do and what [Trump] will actually go along with,” said a person close to the administration.

Lawyers who say they’re providing guidance to the White House declined to comment for the record or be identified, citing confidences with people connected to the administration. They say they’re responding to questions from those people but won’t say who they are.

Ejecting Cordray could be especially risky for a president who campaigned against Wall Street and vowed to protect the economic interests of working Americans, rhetoric that aligns closely with the CFPB’s mission. The bureau — the brainchild of Elizabeth Warren that was created by the landmark Dodd-Frank Act — is popular with Trump voters, and its enforcement of consumer-protection laws has returned $11.7 billion to people harmed by banks, credit card companies and mortgage companies.

This is small-ball thinking. The real issue is not Cordray, though he is clearly an issue, it is the existence of the CFPB. Every duty that the CFPB handles falls within the purview of state regulators and Congress. The very fact that Cordray’s supporters think the CFPB has the ability to go to court to defend Cordray against the President merely underscores the unconstitutional nature of the whole agency. If a fight is going to erupt over this is shouldn’t be over the governance of the CFPB. The GOP should simply eradicate the entire agency.

A decision to do away with CFPB would not be as messy as dismissing Cordray and it would strike directly at the regulatory apparatus that is reducing American consumers to the status of wards of the state.

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