In Defense of the CFPB

On Friday, several consumer rights groups, legal scholars, and members of Congress submitted amicus briefs to the U.S. Court of Appeals for the D.C. Circuit in the case PHH Corporation v. CFPB, in support of the Consumer Financial Protection Bureau (CFPB). With the CFPB’s constitutionality being called into question, many groups seek the defend the Bureau against a possible restructuring by the Trump administration.

“These politicized and misleading attacks against the CFPB, orchestrated by the Trump Administration and their allies in Congress, come at the expense of hardworking Americans who have been deceived by companies and would rather not play by the rules,” said Tamara Draut, VP of Policy and Research at Demos. “In the CFPB’s short history, it has returned hundreds of millions of dollars to millions of Americans; Demos is proud to support and defend the CFPB from these meritless attacks. The CFPB’s non-partisan and independent structure is critical to achieving the agency’s core mission–to protect consumers from unfair or deceptive practices and ensure companies are held accountable if they break the law.”

Previously, the Subcommittee on Oversight and Investigations of the Committee on Financial Regulations held a hearing on the constitutionality of the Consumer Financial Protection Bureau. Subcommittee Chairwoman Ann Wagner’s statement highlighted the problems with the CFPB that she and the other Republican members see as representative of Washington as a whole.

“For the past eight years, the American people under the Obama administration have grown complacent with the unchecked power emanating from Washington and its complete disregard for the Constitution. From healthcare, to energy, to financial services, Washington has worked to plan every aspect of your life and decide what’s best for you,” said Wagner. “Now, more than ever, we have a new obligation to examine the checks and balances of our federal government and ensure that our constitution is reflected by it. It’s time to bring accountability back to Washington for we the people. Nothing embodies the Washington knows best mindset than the Consumer Financial Protection Bureau.”

The Constitutional Accountability Center, on behalf of current and former members of Congress, including current members Senator Sherrod Brown (D-OH), Senator Elizabeth Warren (D-MA), and Representative Maxine Walters (D-CA), and former members Senator Chris Dodd (D-CT) and Representative Barney Frank (D-M), submitted an amicus brief defending the CFPB’s controversial single-director structure.

“In short, as amici well know, the Bureau’s single-director structure was a considered choice, maintained in the face of vocal opposition during months of debate over the legislation that became Dodd-Frank.  Exercising the discretion afforded to it by the Constitution, Congress determined that this structure would best enable the CFPB to ‘keep pace with the changing financial system’ and thus avert another devastating regulatory failure. . .  Congress had every right to make that choice.”

The Hon. Ted Olson, lead counsel in PHH vs. CFPB, previously discussed the constitutionality of the bureau. Referring to the CFPB, Olson said “However tempting it might be to invent new and complex government structures in the interest of accomplishing some presumed efficiency, we abandon the carefully calibrated structure of the Constitution at our peril.”