This week the Washington D.C. Court of Appeals, the second highest court in the land, ruled that the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional. In the 5 years following its creation, the CFPB has unilaterally imposed nearly 50 burdensome regulations upon the American people and small businesses, with no Congressional oversight. The ruling by the court is a victory for the American people and the movement for enhanced accountability from Washington.

The CFPB, the brainchild of Senator Elizabeth Warren (D-Mass.), was created in the midst of the financial crisis by the Dodd-Frank Act. In order to prevent it from being swayed by political pressure, it was given a great deal of autonomy in terms of its leadership and funding. However, because of this autonomy the unelected bureaucrats who lead the CFPB are free to do as they please. This has led to the creation of numerous regulations at a faster pace than any rulemaking body in the federal government and without input from the American people. 

Earlier this year, Representative Jeb Hensarling (R-Texas), Chairman of the House Financial Services Committee, criticized the CFPB’s leadership as “neither elected nor accountable to the American people”. Last month the House Financial Services Committee approved H.R. 5983, the Financial CHOICE Act, introduced by Representative Hensarling that would change the leadership of CFPB into a bipartisan commission with congressional oversight.

The ruling by the D.C. Court of Appeals not only confirms Henarling’s criticism of the CFPB, but goes further by stating that the director of the CFPB “enjoys significantly more unilateral power than any single member of any other independent agency” and that he is the “single most powerful official in the entire United States Government”. The court went on to say that the CFPB’s structure “represents a gross departure from settled historical practice” in regards to the “unilateral power” that has been concentrated in the CFPB’s director.

Today’s ruling confirms that the structure of the CFPB and the director’s role over consumer finance poses a threat to the Constitution’s separation of power and threatens individual liberty. Clearly the time has come to reassess and reform this out of control and unaccountable agency.  

Photo Credit: Consumer Financial Protection Bureau