The Consumer Financial Protection Bureau is misnamed–it writes regulations rather than protecting consumers. It is also more insulated from oversight than any federal agency ever should be.
The Trump administration avoided a conflict with the almost fireproof former director Richard Cordray, who left last week to run for office. This is how Ronald Rubin, a former enforcement officer at the agency, describes what happened in National Review:
Cordray survived only because the president’s advisers felt that making the director a martyr [by firing him] would help his expected Ohio gubernatorial campaign. They underestimated him.
President Trump named OMB Director Mick Mulvaney to serve as acting director. Not to be outdone, on the way out the door Cordray named Leandra English, deputy director, to the job. English is suing the Trump administration to hold onto the acting directorship.
The president claims the right to make the appointment under the Federal Vacancies Reform Act, while Cordray claims the right under Dodd-Frank's stipulation that the deputy should serve as acting director "in the absence or unavailability of the Director."
The CFPB is the brainchild of Senator Elizabeth Warren and just for the record, Cordray, who is the only director so far, was appointed in an unorthodox and constitutionally dubious recess appointment by President Obama. The job requires Senate confirmation, seemingly the only check on this government within a government.
This will be a circus but the real question is: why does this impenetrable and untouchable fiefdom exist within the federal government anyway? Dennis Shaul, a former aide to former rep Barney Frank (the Frank of Dodd-Frank), explained last week in the Wall Street Journal how the CFPB has run amok.
CFPB, as Shaul observed, seriously the Wells-Fargo investigation, is ideologically motivated, and has collected vast sums of money to dole out to its ideological favorites.
There is good reason to believe that President Trump will prevail somewhere down the line, but, meanwhile, a federal agency seems to have come out of the closet as a member of "the Resistance." You may know by now what went on at CFPB headquarters today, but the Wall Street editorial does a good job of capturing the meaning of it all:
On Monday morning [English] could refuse to vacate what she claims is her office and will have to be escorted out. Mr. Cordray and Democrats will portray her and Mr. Cordray as heroes of “the resistance,” the better to raise his name recognition as he runs for Governor of Ohio next year.
The Trump Administration is destined to prevail as a matter of law. But the episode shows that hostility to Mr. Trump is causing his opponents to violate the rule of law themselves. Democrats created an executive-branch agency insulated from Congressional appropriations and presidential control, and now they claim to be able to run it like a branch of government unto itself with a self-sustaining directorship. This is a perversion of constitutional government that the President is right to resist and the courts should reject.
The Trump administration has been successful in rolling back regulations. This battle takes place in an agency that was created to give birth to new regulations–under the guise of protecting the consumer.