Library of Law and Liberty: The Revenge of Richard Nixon: The Consumer Financial Protection Bureau Spreads Its Tentacles

The institutional structure of the CFPB is novel in American history—not merely an independent agency, it is an independent agency tucked inside another independent agency (the ). Its decision-making is not only independent of any review by the President or Congress, but also from the itself. Its budget is independent from the congressional appropriations process and is instead drawn directly from the operating revenues of the , a sum that will rise to 12% of the ’s operating expenses by 2013 (an estimated budget of $448 million). The only check on CFPB’s power is the power of the Financial Stability Oversight Council (FSOC) to veto actions by the CFPB but even then the veto can be exercised only by a 2/3 vote of the Council and only if the proposed action would seriously threaten the safety and soundness of the American financial services system.


Constitution (Photo credit: The COM Library)

This so-called agency is the latest example of government run amok: totally unaccountable, run by an unvetted bureaucrat appointed illegally by a socialist president. How about that for comfort in the process?

Here’s more from Zywicki:

An agency headed by one person, completely insulated from democratic control and budgetary oversight, guarantees an agency that is vulnerable to all of the excesses that strangled the American in the 1970s—regulation that chokes and cripples economic growth. And, indeed, even in its short time in existence the CFPB is already manifesting the problems of cost externalization, undue risk aversion, and other regulatory costs.

In its one-year existence, the agency has not failed to disappoint: one rule that it has issued (illegally, as the agency is not authorized by the Constitution) will impose—ready?—7,684,000 man hours to comply with it! Another one—designed to simplify mortgage disclosures—is 1,099 pages long!

As Zywicki laments:

Regrettably this sort of decision-making was entirely predictable for this agency with inadequate checks and balances.

Inadequate? How about non-existent?

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