(From The Weekly Standard)
The CFPB was created by the 2010 Dodd-Frank Act, a law premised on the belief that the global recession was the result of the insufficient regulation of banks. That the recession happened mainly as a result of government policies and government agencies encouraging banks to act foolishly is an argument we will set aside. The CFPB—according to its website—aims “to protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law.” The idea that no federal authority was empowered to perform such functions until 2010 is laughable. Among others, the Bureau of Consumer Protection, the Consumer Product Safety Commission, the Federal Trade Commission, and the Federal Deposit Insurance Corporation are charged with these purposes. The CFPB is utterly disposable.
Indeed it is disposable. How many regulators do we need? There was an army of these guys long before the CFPB. Sadly there will be when and if the CFPB is killed.
These federal Naderites believe themselves to be unaccountable to the rest of the government. The CFPB’s creators—the Democrats who passed the Dodd-Frank Act on a party-line vote—said they wanted the agency to be “insulated” from political pressures. That may sound high-minded, but government agencies in the American republic are not supposed to be insulated from the people’s representatives. We have national elections every two years for a reason. The CFPB is funded by the Federal Reserve rather than congressional appropriations, and its presidentially appointed director serves a five-year term (so as not to coincide with any one administration) and can only be removed for cause. In 2016, the D.C. Circuit Court of Appeals ruled that the agency’s structure violates the Constitution’s separation of powers. That case is under appeal…
…The agency aggressively targets small and mid-sized businesses its agents believe are taking advantage of consumers—particularly local and regional banks—with the result that these institutions must spend more on compliance and legal counsel. Who pays the price for that? Ironically, consumers.