Saturday, January 07, 2012

Why the GOP is fighting the CFPB

If you want to know why the Republicans in the Senate were fighting against the nomination of Richard Cordray to the Consumer Finance Protection Bureau, thus halting the new agency from beginning its work, this snippet from Jonah Goldberg's column, An Imperial Sham, tells you everything you need to know:

The CFPB is a constitutional affront, the crowning achievement of this White House's mantra of never letting a crisis go to waste.

The agency has the power to regulate any practices it deems "unfair" -- primarily the practices of institutions and businesses that had nothing whatsoever to do with the financial crisis.

Indeed, it has blank-check power to write the rules it wants to enforce. Worse, it cannot be reined in by Congress, because Dodd-Frank gave it a self-funding mechanism. It can simply take up to 12 percent of the Federal Reserve's operating expenses to do whatever it wants. The power of Congress is ultimately the power of the purse. But in their finite wisdom, Democratic lawmakers gelded themselves. They also insulated the rogue agency from the courts, requiring that judges defer to the CFPB's legal theories.

So it has no accountability to Congress and even the courts won't be able to rein it in or restrict it any way.

But that's not all. Despite what Pres. Obama is saying about being blocked by Republicans, even Democrats recognize the problems and have supported the exact changes Republicans are pushing for, as Michelle Malkin explains:

As Senate Republicans have been pointing out for months, Dodd-Frank threw out judicial review, removed CFPB from the congressional appropriations process, provided five-year tenure protection for the director and transferred the agency from the Treasury Department to the opaque and unaccountable Federal Reserve.

Obama and Democratic leaders themselves recognize the recklessness of vesting so much unfettered power in a single individual. In 2009, Obama floated a bipartisan board to oversee enforcement. Democratic Sens. Dick Durbin of Illinois, Charles Schumer of New York and Sheldon Whitehouse of Rhode Island all co-sponsored legislation backing a commission. Massachusetts Democratic Rep. Barney Frank was also an original sponsor of a bill creating the very kind of five-member panel Republicans have proposed.

The House passed these and other structural reforms last year, but the Senate has failed to act, and the White House insists on demagoguing reformers. Moreover, taxpayers remain in the dark about how and how much the CFPB is spending, because Dodd-Frank allows the agency to draw funds from the Federal Reserve's operating expenses. Out of sight, out of mind.


It's about consolidating bureaucratic authority and granting unprecedented immunity to a single super-cop from congressional and public oversight.

This agency will NOT be a protector of consumers - not when its existence and structure is an affront to the Constitution.

Government is supposed to protect our God-given liberties. Any agency with this much power and control - and no checks from the judicial branch - will end up a tyrant, not a protector, as its beginnings are proving.


skeeter1107 said...

My hope is that someday the Democrats take the view that loyalty to the country and constitution are more important that party politics. They have essentially said that the constitution can be used as a place mat as long as they are the ones using it.

It will come back to bite all of us in the butt, Democrats included. I would be and have been just as offended when Republicans have tried and succeeded at unconstitutional power grabs.

During the time of our Founding Fathers, it was an insult to accuse someone of being "A Party Man." Essentially holding your political party above the country and constitution. How things have changed. Sighhh.

tb_scurvy said...

I suppose if the White House mantra is never let a crisis go to waste, it follows that the Republican mantra is don't do anything that might keep a crisis from repeating itself.

The idea that this agency is somehow immune to judicial review is hogwash. The Constitution is the law of the land, and the Obama administration can no more "run over it" than Bush did before him, and so on back through the previous administrations.

If something in this agency is unconstitutional, it WILL be challenged in court, and it WILL be determined by the judiciary whether or not this agency violates the Constitution.

Despite the talking head histrionics, the legal basis for our republic is IDENTICAL to what it was prior to the election of 2008.

Maggie said...

You've obviously missed the point, tb scurvy.

The courts must rule based upon the law as written and the law requires the courts to defer to legal opinions issued by the agency itself.

Yes, the law can be challenged as unconstitutional in that it requires the legal opinions of the agency to take precendence over other legal opinions, but any challenges to the rulings issued by the agency will be based upon the legal opinions of the agency.

It's the same way for red light cameras and speed camers. The local legislatures (including the City of Toledo) have written the law on the cameras to say that the photograph of the violation is 'prima facie' evidence of wrong doing by the owner of the vehicle. Hence, Ohio courts have ruled that, based upon the law, vehicle owners are guilty unless they produce another guilty person to take their place.

This is guilt by ownership - not guilt based upon preponderance of the evidence - clearly a constitutional issue. And, it means that your only defense to a guilty finding on the crime is not just to prove you weren't the one driving (such as an out of town hotel stay, etc...) thus documenting your innocence, but requires to do the job of the police and find the guilty party.

Just because it should be a certain way, doesn't ensure that it will be.

Maggie said...

Here's another example: the Constitution says I should be immune to search and seizure except with probable cause as determined by a court (usually through a search warrant). But the TSA was created and presumes that all individuals traveling via a plan are subject to search and seizure. My decision to fly does not constitute probable cause that I am going to commit a crime any more than my decision to make a deposit at a bank makes a suspect for robbing it.

But despite the Constitutional guarantees, we still have the TSA searching people and seizing items.

The courts have done so much to protect that Constitutional right that I'm certain we can trust them to protect any other rights that might be infringed by the CFPD.

I'll end my sarcasm now.

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