If we’ve learned anything over the past year, it’s that the Republican party, even when handed full control of the American government, is so riven and otherwise dysfunctional that it simply can’t govern. The one consolation Republicans have is that voters seem to intuitively understand that while the Democratic party is more effective, it’s ideological imperatives mean it can’t be trusted to govern, either. The recent controversy over the Consumer Finance Protection Bureau (CFPB) is another in a long line of exhibits as to why exactly that is.
Last week brought news that “the resistance”—in the form of faceless, unaccountable federal bureaucrats—are actively fighting the legitimate assertion of presidential authority by CFPB’s new head, Mick Mulvaney. This represents a legitimate threat to constitutional order and rule of law. These bureaucrats are are acting in defiance of two unequivocal federal court rulings, and they are going to battle against the Trump White House to defend their own prerogatives.
For years now, conservatives have been warning about the growth of the “administrative state.” The size of the federal bureaucracy has grown unchecked both in actual size and in de facto legislative and regulatory authority—to the point that it has become almost a fourth branch of government. The bureaucracy is further strengthened by union rules (it’s incredibly difficult to fire individual employees) and simple self-interest (all bureaucracies seek to expand their size and power, making them constitutionally incapable of seeking more limited forms of government).
The Consumer Finance Protection Bureau is the embodiment of all these problems. Created as part of the Dodd-Frank financial legislation, the agency was supposed to be a federal consumer watchdog guarding against predatory mortgage and auto lending practices, unfair credit card terms, and the like. It was brainchild of progressive darling Senator Elizabeth Warren.
What made the CFPB so troubling, though, wasn’t its mission. It’s the fact that it was intentionally created to be a dictatorial technocracy answerable to no one.
Congressional Democrats wrote a law creating the agency so that it was not accountable to Congress or even governed by the congressional appropriations process. Nor was the CFPB accountable to the executive branch.
Unlike other independent regulatory agencies, such as the SEC and FCC, the CFPB is not governed by a bipartisan board. It’s governed by a single director, who, once appointed, cannot be fired by the president unless the president demonstrates cause. This means the CFPB has the power to assess literally billions of dollars in fines against private entities that do not go into the federal treasury and are dispersed according to the caprice of the CFPB director. The CFPB is accountable to no one but itself.
After the agency racked up a troubling list of regulatory abuses in its relatively short existence, a federal court finally stepped in and imposed some degree of constitutional order. The judge was unsparing in just how grossly unconstitutional the structure of the CFPB was:
It’s important to remember that for Democrats, this wasn’t a bug—it was a feature. They explicitly designed the CFPB to have this much unchecked power—such is their faith in unelected federal bureaucrats. Be that as it may, the federal court eventually ruled that the head of the CFPB must subject to an “at will” firing by the president.
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Yet despite the federal court’s clear ruling the agency was subject to presidential authority, the CFPB still tried to circumvent accountability. After CFPB director Rob Cordray announced he was stepping down in November, he tried to appoint his own successor from within the agency. The Trump administration instead appointed Office of Management and Budget Director Mick Mulvaney. This lead to a brief showdown about who would be in charge of the CFPB. But just as the law that created the CFPB could not supersede the Constitutional lines of authority, the law creating the CFPB could not supersede the Vacancies Reform Act of 1988 and the precedents it established. The courts sided with the White House. “On its face, the VRA does appear to apply to this situation,” ruled a U.S. District Court judge.
So then, have bureaucrats at the CFPB finally conceded that the democratically-elected president of the United States controls their agency? Based on a report from Tuesday’s New York Times, not quite:
So the question is, where does this end? For all the concern about the Trump administration breaking norms—which is not altogether illegitimate, by the way—the federal bureaucracy’s response could do just as much damage in the long run. The “Democrats’ #Resistance is creating a genuine constitutional crisis in which governmental power is not allowed by them to be peacefully transferred after a lawful election,” observes Georgetown law professor Randy Barnett. “The potential for escalation is very very dangerous.”
In the meantime, there is not enough contempt in the world for bureaucrats who will not bend to the proper political authority in this instance. Or as Adam White notes, “Congratulations, America: your mortgages, auto purchases, and credit cards are regulated by anonymous bureaucrats who fancy themselves as ‘Dumbledore’s Army.’ Maybe ‘CFPB’ actually stands for ‘Children’s Fantasy Playtime Bureau.’”
