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Category Archive: Supervision

1. CFPB Finances Under Fire

   February 6, 2018 10:27 pm Leave a Comment

   Richard Cordray may be running for governor in Ohio, but he left the Consumer Financial Protection Bureau (CFPB) in shambles. More than 25 free-market organizations, including Americans for Tax Reform and FreedomWorks, have asked CFPB Acting Director Mick Mulvaney to audit the agency’s finances.

   Jason Pye, vice president at FreedomWorks, had the following to say: “Every aspect related to the CFPB should be put on the table, and what we can do through administrative action, either through the audit process or whatever rollbacks we need to do, we should do it.”

   For years, the agency escaped congressional oversight, unilaterally issuing broad regulations that overburdened employers and employees alike. Under Cordray’s watch, the U.S. Court of Appeals for the District of Columbia Circuit described the CFPB as “unconstitutionally structured” and a “gross departure from settled historical practice.” In U.S. Circuit Judge Brett Kavanaugh words: The CFPB’s structure “poses a far greater risk of arbitrary decision making and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency.” The Department of Justice (DOJ) even filed court papers asking a federal appeals court to order the restructuring of the CFPB. The DOJ argued that the agency’s structure came into a separation-of-powers issue, since Cordray wasn’t sufficiently answerable to the White House.

   An audit is long overdue. It’s time to hold the CFPB accountable, and see where taxpayer money’s been going all these years.

2. Opinion Pages Bombard CFPB with Scathing Critiques

   April 26, 2017 5:54 pm Leave a Comment

   First, there was Sen. Ben Sasse’s (R-NE) February op-ed column in USA Today: “Nobody in his right mind thinks the lesson of 2016 was ‘give more power to the elites.’ In a country of 320 million Americans, we don’t have room for any kings… It’s time to fire Richard Cordray.” It didn’t take long for Rep. Jeb Hensarling (R-TX) to echo these concerns, calling Cordray’s agency “destructive and dangerous.”

   Pressure’s only mounting on the Consumer Financial Protection Bureau (CFPB), an unaccountable federal agency led by an even less transparent director. In recent weeks, several members of Congress have penned op-ed pieces criticizing the CFPB for its general lack of accountability. In The Charlotte Observer, Rep. Robert Pittenger (R-NC) argued that the “CFPB’s breathtaking lack of accountability and proclivity for excessive regulations have harmed consumers and made it difficult for businesses to create jobs.” In his words: “Due to the lack of oversight, [the] CFPB has been free to create excessive regulations, which restrict job growth, restrict access to credit options, and increase the cost of credit.”

   In The Detroit News, Rep. Bill Huizenga (R-MI) criticized the “one-size fits all regulatory structure,” while CNBC.com ran a Rep. David Kustoff (R-TN) piece claiming that “unelected bureaucrats and overregulation [have] handcuffed community banks, regional banks, credit unions, and other lenders.”

   That’s called losing in the court of public opinion.

3. The CFPB’s Worst Week Ever

   March 22, 2017 1:35 pm Leave a Comment

   It’s been a rough week for the Consumer Financial Protection Bureau—perhaps the roughest in the agency’s history.

   First, the Department of Justice (DOJ) filed court papers asking a federal appeals court to order the restructuring of the CFPB. The DOJ argues that the agency’s structure—outside the purview of congressional oversight—comes into a separation-of-powers issue, since CFPB Director Richard Cordray isn’t sufficiently answerable to the president. (Only the White House can fire Cordray, and only for cause.) In the DOJ’s words: “There is a greater risk that an independent agency headed by a single person will engage in extreme departures from the president’s executive policy.” The Justice Department also emphasized that the president should be able to fire Director Cordray at will.

   It only gets worse. Yesterday, the House Financial Services Committee held a hearing called “The Bureau of Consumer Financial Protection’s Unconstitutional Design,” bringing four witnesses to comment on the CFPB’s unconstitutional lack of accountability to the executive branch or elected officials. In one exchange, Rep. Scott Tipton (R-CO) asked Ted Olson, a legal expert, about the agency’s structure. “You have to have accountability,” Olson responded. “[The CFPB] is not accountable to you or the president. Who can control that agency? No one can control that agency.” Olson also noted that he has “never seen the breadth of authority of the CFPB and the lack of oversight and responsibility to Congress in any other agency.”

   For Director Cordray, next week can’t come soon enough.

4. CFPB Comes After Free Speech Next

   October 31, 2016 9:00 am Leave a Comment

   It’s been a rough month for the Consumer Financial Protection Bureau (CFPB). In early October, the U.S. Court of Appeals for the District of Columbia Circuit described the CFPB as “unconstitutionally structured” and a “gross departure from settled historical practice.” The appellate court even curbed Director Richard Cordray’s nearly limitless power, making him removable by the president at any time and for any reason.

   Now the rogue agency has come under attack from legal experts across the political spectrum. What now? For issuing a proposal to force those under CFPB investigation to keep quiet about the probe. In effect, the CFPB wants to prohibit individuals and companies from disclosing confidential investigative information, keeping investors, shareholders, and the American public in the dark about federal investigations—threatening free speech and the public’s right to information.

   Opposing the mandate, William Johnston—chairman of the American Bar Association’s Business Law Section—argues, “Our legal system…presumes that ordinary citizens are free to discuss government activities and presumes that government efforts to restrain such speech are unconstitutional.” He adds that the CFPB’s proposal presents “severe First Amendment problems.” Johnston is joined by Arthur B. Spitzer, legal director at the American Civil Liberties Union, who also points to “serious First Amendment problems” and likens the CFPB plan to a series of “gag orders.” Rep. Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, fears that it will ultimately lead to “unwarranted fishing expeditions.”

   Unfortunately, government fishing trips have become far too common in Dodd-Frank America.

5. CFPB Structure Ruled Unconstitutional

   October 11, 2016 7:50 pm Leave a Comment

   “Unconstitutionally structured.” A “gross departure from settled historical practice.”

   That’s how the U.S. Court of Appeals for the District of Columbia Circuit recently described the Consumer Financial Protection Bureau (CFPB), the rogue federal agency led by Director Richard Cordray. The appellate court ruled that Director Cordray, who was appointed by the Obama administration, possesses too much power since he can only be fired by the president and for just cause. As U.S. Circuit Judge Brett Kavanaugh argues, the CFPB’s structure “poses a far greater risk of arbitrary decision making and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency.”

   Addressing this concern, the court voided the CFPB’s for-cause provision, making Director Cordray removable by the president at any time and for any reason. It also threw out a CFPB decision imposing a $109 million penalty on PHH Corporation, a mortgage servicing company. The CFPB claimed that the company referred customers to insurers who then purchased reinsurance from a PHH subsidiary—an alleged kickback scheme. Yet the appellate court found that the CFPB overstepped its bounds in issuing the penalty.

   Just more of the same from America’s most unaccountable bureaucrats.

6. CFPB Leadership Shakeup Just Another Disappointment

   August 19, 2016 8:41 pm Leave a Comment

   The Consumer Financial Protection Bureau (CFPB) recently experienced another shakeup in its leadership. After serving as the agency’s chief of staff, Chris D’Angelo is now the CFPB’s new head of supervision and enforcement—the third-most powerful position at the agency—beating out several experienced attorneys for the post.

   According to American Banker, the move has prompted serious concerns. For starters, many observers doubt his experience. As Professor Todd Zywicki of George Mason University claims, “It’s an unusual move…especially for somebody who doesn’t have a deep background in the area.” To others, D’Angelo’s role as a regional field director for President Obama’s 2008 campaign and member of the administration makes him “too political for the role he is now playing.”

   This is business as usual at the CFPB, whose employees sent 97 percent of their political donations to Democratic candidates in 2012. The agency is riddled with liberals: More than 25 current employees worked on at least one of the Obama campaigns—not to mention those who landed positions in the administration.

   Unsurprisingly, D’Angelo also beat out several women and minorities for his new position. The CFPB has long been criticized for perpetuating a culture of racial discrimination, where minority employees often fall behind their white counterparts. One former CFPB employee likened the agency’s workplace culture to a “plantation,” arguing that most black employees are given lowly data entry tasks while white employees receive more complex assignments. Another agency worker described his CFPB experiences as a “living hell,” claiming that top brass often rely on retaliation to assert their power.

   The promotion of Chris D’Angelo seems like just another disappointment coming out of the CFPB.