(Happy Birthday Liz!!! - promoted by Rob "EaBo Clipper" Eno)
Powerline reports that a lawsuit was filed yesterday challenging the constitutionality of Liz Warren's Consumer Financial Protection Bureau (CFPB). The lawsuit alleges that the CFPB has no meaningful congressional or judicial oversight. http://www.powerlineblog.com/a...
The lawsuit's major claim is that the formation and operation of the Consumer Financial Protection Bureau (CFPB) violates the constitution because its director (or czar) is not accountable to Congress or the President, and the decisions of the agency are not even subject to judicial review. The CFPB escapes meaningful congressional oversight because its budget - some $400 million - comes from the Federal Reserve. As for the president, he cannot overrule actions taken by the CFPB, and can only remove the director "for cause," e.g., inefficiency, neglect of duties, or malfeasance, not disagreement over substance. Finally judicial review is limited because courts are required by the legislation to defer to the CFPB regarding the meaning or interpretation of any provision of federal consumer financial law.
These features of Dodd-Frank raise obvious concerns about separation of powers and checks and balances, i.e., accountability. The plaintiffs point out that Dodd-Frank grants the CFPB sweeping authority over consumer financial product and services firms. For example, the CFPB has the open-ended power to determine which lending practices are "unfair," "deceitful," or "abusive" under the Act. It can also unilaterally exempt any class of covered persons from rules it promulgates.