Consumer Financial Protection Bureau

Fight Over CFPB Director Shows—Again!—How Powerful Government Entities Backfire on Their Creators

Liberals and progressives might soon find themselves agreeing with libertarian critiques of the CFPB's unaccountable structure and powerful director.

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Today the architect of the Consumer Financial Protection Bureau, Sen. Elizabeth Warren (D-Mass.), attended a rally to protest President Donald Trump's appointment of Mick Mulvaney to be acting director of the powerful regulatory agency.

Appointing Mulvaney, Warren warned in a series of tweets on Saturday, will "destroy the agency" and "turn the CFPB into a disaster."

There is both a legal and a political side to the controversy that erupted this week when both Mulvaney and former CFPB deputy director Leandra English claimed they were the rightful heads of the agency. Unusually and importantly, the bureau is run by a single person instead of a multi-person panel. Former CFPB director Richard Cordray appointed English as the agency's deputy director before resigning last week, but federal law gives the president the power to appoint agency heads when vacancies occur. Both Mulvaney and English have reasonable claims based on different federal statutes, but Mulvaney's claim is probably a little stronger, for reasons Peter Suderman detailed yesterday.

Federal courts will settle the legal question (UPDATE: On Tuesday evening, a federal judge refused to block Mulvaney's appointment). As a matter of politics, though, the progressives who championed the creation of the CFPB find themselves in a difficult spot here. They can oppose Mulvaney's appointment to run the agency on the grounds that he will use the CFPB's powers to radically alter the relationship between financial institutions and consumers, or they can oppose libertarian critiques of the unaccountable power vested in the singular position of the agency's director.

Russ R. Scott/newzulu/Newscom

They can't have it both ways. To support the CFPB as an entity that should not be subject to significant oversight from either Congress or the White House means that the director gets to do pretty much whatever he or she wants.

Congress built the CFPB to be isolated from oversight. Its budget comes directly from the Federal Reserve, removing Congress' ability even to control the purse strings. That means Democrats won't be able to steer a Trump-appointed director at the CFPB even if they take back control of the legislative branch after the midterms. This has been one of the chief critiques of the bureau ever since the CFPB was created. Indeed, it was the subject of a federal lawsuit that led a three-judge panel to rule the agency's structure unconstitutional. The ruling was appealed and re-heard by the full court in June.

"The Director enjoys significantly more unilateral power than any single member of any other independent agency," wrote Judge Brett Kavanaugh in the unanimous opinion. "Indeed, other than the President, the Director of the CFPB is the single most powerful official in the entire United States Government, at least when measured in terms of unilateral power."

This has been a point of contention since the inception of the CFPB. Ordinarily, independent agencies authorized by Congress—like the Securities and Exchange Commission and the Federal Communications Commission—must have a multi-member commission at the helm. The CFPB was created by Congress but a political compromise during negotiations over Dodd-Frank left the bureau with a single executive.

That's a compromise that CFPB supporters might now wish hadn't been made, because the unchecked power of the CFPB's director may soon reside in the hands of someone who, in Warren's mind at least, wants to tear down the agency she worked to create.

For what it's worth, Mulvaney told reporters yesterday that "rumors that I'm going to set the place on fire or blow it up or lock the doors are completely false." Still, he added, "anybody who thinks that the Trump administration CFPB will be the same as an Obama administration CFPB is simply being naïve."

The shortsidedness is stunning. As long as the right people are running agencies like the CFPB, Warren seems to be saying, then the unaccountable nature of the bureau is just fine. The problem is that no one will always agree with the people who run government agencies, and the only solution to that problem is to stop handing over so much power to unelected—and in the case of the CFPB, unaccounable—executive branch officials.

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  1. They can’t have it both ways.

    Makes me think you’re new at this, Broheim.

    1. Nobody can have anything both ways. That doesn’t seem to stop people from trying though.

      1. As worded it seemed like he was saying “having it both ways” referred to making contradictory and hypocritical arguments. Which of course they can and will do. Directly to your face. Without feeling a hint of shame.

        But I think he meant they can’t both have isolation from oversight as well as the ability to exercise oversight when they want to.

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  2. Mulvaney told reporters yesterday that “rumors that I’m going to set the place on fire or blow it up or lock the doors are completely false.”

    “Nope, i’m gonna drill a hole in the roof and slowly fill it up with concrete.”

    1. Please fill it quickly; if you fill it slowly, some will escape.

  3. It’s like they’re playing a wheel of fortune, hoping the wheel will favor them. How random our world has become!

    1. When it comes to politics, trying to describe the game of chess to the progressives falls on deaf ears, and there’s a certain… i dunno, Machiavellian logic to it. If they demand an all-powerful federal agency based on the chessboard that’s favorably set to their strategy it would seem you could argue that two moves, four moves, eight moves down the line, the board may no longer be so favorably set. Instead of accepting the back-and-forth nature of our political system, they merely argue that they need to play better chess to keep the board favorably positioned. They never seem to fully acknowledge that government power might be the problem, even when it’s working in their favor.

      1. I figure when the republic finally issues its death rattle, it’s more likely that a conservative of some sort will be in power. Oops.

        1. It’ll certainly be someone with a pen and a flare gun.

      2. Exactly. They don’t mind the possibility of losing, they want to elevate the importance of the game, to motivate their players.

    2. Pat Sajak is Ganesha, guiding us to choose our paths wisely and risk our karma with care; while Vanna White is Shiva, dancing her endless dance of creation and destruction.

  4. “People will die!”

  5. They can’t have it both ways. To support the CFPB as an entity that should not be subject to significant oversight from either Congress or the White House means that the director gets to do pretty much whatever he or she wants.

    Which they are totally fine with, as long as it’s their guy doing it.

    1. Jesus, what is it with political parties? Washington’s Farewell Address was right on target about this.

      1. Humans are weak and flawed creatures, but in no way more contemptible and puerile than partisanship.

        1. That partisanship when expressed as loyalty to family or community is often viewed as a virtue.

      2. Why forego the advantages of so peculiar a situation? Why quit our own to stand upon foreign ground? Why, by interweaving our destiny with that of any part of Europe, entangle our peace and prosperity in the toils of European ambition, rivalship, interest, humor or caprice?

        It is our true policy to steer clear of permanent alliances with any portion of the foreign world; so far, I mean, as we are now at liberty to do it; for let me not be understood as capable of patronizing infidelity to existing engagements. I hold the maxim no less applicable to public than to private affairs, that honesty is always the best policy. I repeat it, therefore, let those engagements be observed in their genuine sense. But, in my opinion, it is unnecessary and would be unwise to extend them.

        +1 teleprompter

  6. Congress built the CFPB to be isolated from oversight. Its budget comes directly from the Federal Reserve, removing Congress’ ability even to control the purse strings.

    Yeah, that’s not entirely constitutional (but hey, neither is the Fed).

    1. And adds to the number of reasons to eliminate the Fed.

  7. When they created the CFPB, they expected that Queen Hillary would ascend the throne because It’s Her Turn! Then after her eight years (assuming she would have actually left without being pried loose from the White House with a crowbar) it would be Warren or Bernie or Michelle Obama or some other progressive hero. I remember warning lefties that it might not work out that way; they laughed.

  8. The only way to kill this beast is to use it to run over the people who created it. Let them have a few years of having things shoved up their asses the way they wanted to shove them up everyone else’ asses and they just might listen to reason. That is no guarantee of course. But at least it makes them live by the same rules they want everyone else to live by and that is something.

    1. What if they were able to wrestle the dildo away and turn on you?

      1. Then they will do exactly what they were going to do anyway. My refusal to do it back to them won’t cause them to not do it to me. The only thing that is going to make them want to get rid of the damned thing is the threat that I might use it on them. Take that away and they will happily fuck me every chance they get and then thank me for being so principled when I don’t do the same to them.

        1. Except they wouldn’t even thank you. They’d say you were ungrateful for not thanking THEM.

          1. “You should be grateful. You didn’t fuck that!”

  9. The shortsidedness is stunning. As long as the right people are running agencies like the CFPB, Warren seems to be saying, then the unaccountable nature of the bureau is just fine. The problem is that no one will always agree with the people who run government agencies, and the only solution to that problem is to stop handing over so much power to unelected?and in the case of the CFPB, unaccounable?executive branch officials.

    That’s not short sighted, that’s quite deliberate. It’s called raising the stakes. Warren wants there to be a lot of power there, so that it’ll be very important who fills the office, now & in the future.

    1. They want that power there cause they were going to use the CFPB to centrally plan the economy and to a small degree society as a whole. Name an industry today that can function without using a bank? Sure they can’t go after Gun Manufactures for instance but they can get banks to not work with them by backroom threats to sic this agency on them if they continue to work with banks. We have already seen them try to weaponize the IRS but they got busted. Now though they have an agency with zero accountability they can use to strong arm the very financial instruments business needs to function.

  10. They can’t have it both ways.

    We will embrace this rebellion. You will support it from our lands in the north. I will gain English favor by condemning it, and ordering it opposed from our lands in the south.

  11. So elections have consequences? Who knew?

  12. I am shocked to discover the Pocahontas made a boo boo.

  13. “The shortsidedness is stunning. As long as the right people are running agencies like the CFPB, Warren seems to be saying, then the unaccountable nature of the bureau is just fine.”

    That isn’t shortsightedness, it’s a political philosophy that doesn’t accept the validity of an actual opposition, and has no intention of letting “elections have consequences” unless it’s in their favor. Democracy is just a tool to serve the agenda.

    When they lose it’s lawsuits, protests, personal destruction of blasphemers, and riots and worse if needed.

    Plus they believe time is on their side after enough old conservatives die out and they import enough left-leaning voters. so ultimately they expect all political tools to be only theirs. like is already the case in some states

    You will bend over and take it one way or the other.

    1. The punchline, however, is hysterical as it’s a fact, people become more ‘conservative’ as we age, therefor we rail against our future selves when we call for the “old guard” to fail 😉

  14. “The only thing that will turn the @CFPB into a disaster is for @realDonaldTrump to ignore Dodd-Frank & name an acting director determined to destroy the agency.”

    In other words, once an agency is created, it can never be run by someone who does not share the ideological worldview of the people who created it. Turns out Democrats really do not want to abide by the results of elections.

  15. She can absolutely have it both ways. Warren doesn’t care about unchecked power in a single agency. That’s a feature, not a bug. The Republicans aren’t going to abolish the CFPB, even though they should. When D’s are in power, they can use it with no oversight. When R’s are in power, D’s can use any reason to claim R’s are out to hurt the little guy by “dismantling these vital protections” and use it as a rallying cry for why more D’s need to be elected, and the MSM will carry the water.

    1. Yup. The CFPB was their wet dream. An agency they could freely use as a weapon to institute their policies without them coming before the legislature. No industry can function today without the financial infrastructure of banks. They can use the power of the CFPB to strong arm banks to prop up industries they support and go after the ones they do not. How anyone in their right mind supports the concept of this agency is beyond me. That is unless you are a corrupt Marxist like Squaw Sitting Bulls&*t.

  16. During the Trump debates, someone should have asked Elizabeth Warren if she would accept the results of the election.

  17. Something about a goose and a gander… Pope shittin’ in the woods. Mixed metaphors aren’t my thing.

  18. As Salvor Hardin will say several thousand years from now “A nuclear blaster is a good weapon, but it can point both ways.”…

  19. There is always a good time to have a discussion about psychology. Choose the right psychology essay topic and write about it.

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