By David McGarry, Research Director, Taxpayers Protection Alliance
Donald Trump’s current mood seems to be a bellicose one as he faces down the alphabet soup of agencies in Washington, D.C. One agency that deserves to feel the horns of the bull-in-the-china-shop-in-chief is the Consumer Financial Protection Bureau (CFPB), an ugly mess of structural abnormalities and constitutional affronts. The Dodd-Frank Act of 2010, which created the agency, “delegate[d] effectively unbounded power to the CFPB, and couples that power with provisions insulating CFPB against meaningful checks,” C. Boyden Gray and Adam J. White wrote. According to the Manhattan Institute’s Ilya Shapiro, the agency enjoys latitude “beyond even ‘independent’ agencies like the [Securities and Exchange Commission] and [Federal Communications Commission].”
The CFPB survived a potentially lethal constitutional challenge at the Supreme Court in 2024 in CFPB v. Community Financial Services Association of America (CFSAA). But that fact should not halt — nor even pause — Trump and congressional Republicans. As the saying goes, Congress brought the CFPB into this world, and it can take it out. The majority opinion in CFPB v. CFSAA was neither uncontested in its reasoning nor a sanction of the wisdom of the agency’s structure. Bad is not a synonym for unconstitutional. Not everything that violates the Constitution’s spirit violates its letter, or the dictates of prudence. After all, the Fourth Amendment can be put up for sale, bureaucrats can pressure industry (to a point), and tax policy can be perverted to effect economic planning.
When it finds a problem of constitutionalism or governance, Congress ought to act — indeed, to act is its duty. The legislative branch is, after all, the first branch of the American government. It would do better to strike out ahead of the courts instead of hanging behind and waiting for judges to smooth over constitutional disputes, as has become its wont.
“The accumulation of all powers, legislative, executive, and judiciary, in the same hands . . . may justly be pronounced the very definition of tyranny,” James Madison wrote in Federalist No. 47. Nevertheless, the CFPB holds just such an accumulation of power.
Moreover, the CFPB funds itself unilaterally — without Congress — setting its own budget and requisitioning funds from the Federal Reserve. In surrendering the power to pull hard on the CFPB’s purse strings, Congress gave the agency free rein. Never mind the hundreds of years the English-speaking peoples spent in periodic political resistance to ensure that, as a basic matter of accountability, executive officials remain fiscally beholden to elected legislators.
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