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.