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It's primary gimmick is the following: it isn't dependent on funding from US Congress. At one time, it even used to be independent of the US Executive Branch until a court ruling in 2016 that the US President could fire the head of the agency.
A three-judge panel on the 5th Circuit Federal Court of Appeals ruled this week that the CFPB's structure is unconstitutional because Congress has no control over the agency's budget, which is funded entirely by the Federal Reserve. Under the terms of Dodd-Frank, the CFPB is entitled to receive a budget totaling up to 12 percent of the Federal Reserve's annual operating expenses, and the Federal Reserve is not allowed to refuse the CFPB's requests for funding.
Now, that funding model has been used to reverse a ruling by the CFPB as unconstitutional with the potential to put all its rulings since formation into question on the same constitutional basis.
Why it matters: The reasoning behind the ruling, if upheld, could potentially invalidate all the rules enacted by the CFPB over its 11-year existence — including regulations underpinning the U.S. mortgage system.
This is one of the big reasons I oppose the passing of bad law even when it serves a concrete good. It can take a long time to fix the massive problems that such law brings.
And note that a key argument by the court was that there was no precedent for the CFPB's unconstitutional structure. If there had been other agencies with similar setups, this could have been very hard to overturn. Similarly, the CFPB is a precedent for future breaking of the US Constitution along these lines. Without the ruling, there would have been a stronger case for future misdeeds of this sort.
(Score: 1) by khallow on Sunday October 23 2022, @02:02AM (6 children)
But it does mandate that Congress doesn't have the power to create entities that are unaccountable to Congress! Here, no entity, including Congress, has the power to change CFPB's funding without an act from Congress to first reverse that immunity. That's unconstitutional. I get you don't understand why, but it still remains that it's unconstitutional.
Keep in mind that there's decades of attempts to create laws and funding streams that can't be simply reversed by future legislatures. For another example, the use of international treaty to create space projects and obligations (particularly the ISS) that are immune to defunding by US Congress. Or the funding stream of Social Security which allowed for hundreds of billions to be put into general revenue without the appearance of increasing taxation.
This is the natural next step: create agencies with power, funding, and leadership completely immune to elected leadership. It's folly to let this continue.
(Score: 0) by Anonymous Coward on Sunday October 23 2022, @02:20AM (2 children)
CIA and IRS come close
(Score: 1) by khallow on Sunday October 23 2022, @11:49AM (1 child)
(Score: 0) by Anonymous Coward on Sunday October 23 2022, @07:12PM
Our system is one of extortion, with criminal cartels making *offers that can't be refused* to the politicians.
(Score: 0) by Anonymous Coward on Sunday October 23 2022, @11:33PM (2 children)
Whataya know, it's the next weekend, khallow. Hey, I just remembered, wasn't Russia supposed to bomb Seattle, about now?
(Score: 1) by khallow on Monday October 24 2022, @02:33AM (1 child)
(Score: 0) by Anonymous Coward on Monday October 24 2022, @03:04AM
Oh, it looks like Putin has traded some bluster and hubris, for a slice of humble pie with a dollop of reality for savor. It's a great combination; you might try it. Careful that it doesn't get stuck in your craw.
He's been stuck in pointless ten-year wars, before.