The CFPB is/was housed within the Federal Reserve. The funding for the CFPB comes/came from the Federal Reserve. That’s a problem as Congress is the entity which is to allocate money for such programs.
(From The National Review)
The court declared unconstitutional the unprecedented independence that Congress conferred on the Consumer Financial Protection Bureau. This legal skirmish about one aspect of this one tentacle of the administrative state may seem recondite and trivial. It concerns, however, two momentous matters. One is the integrity of the federal government’s Madisonian architecture. The other is something that not even the prescient James Madison could have anticipated — Congress’s modern eagerness to diminish itself…
…Until the court’s decision last week, the CFPB, unlike any federal institution created since 1789, was uniquely sovereign: Its director was appointed by the president for a five-year term — longer than the president’s — and the director could be removed by the president only “for cause.” That is, only for “inefficiency, neglect of duty, or malfeasance,” not for reasons of policy.
Dodd-Frank in many ways was built in the same style as Obamacare, that is to say poorly with little regard for the Constitution. (Let’s be honest, probably NO regard.)
It should also be noted that Elizabeth Warren who championed the CFPB, who is often a critic of the banks, has refused to get on board with an audit of the Federal Reserve. We wondered in a previous post whether it was because her baby was fed at the teat of the Fed that she refused to do the right thing.
*To be clear the ruling did not shut the CFPB down. It merely changes how the director is appointed and removed. Instead of a 5 year term he or she will be like any other cabinet officer and can now be removed at the president’s discretion. This is a small win, however the CFPB still exists, continues to consolidate power, and still receives it’s funding from the Federal Reserve which can just create its own money when it likes. So perhaps 1 half step forward and 2 back.