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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: 0) by Anonymous Coward on Monday October 24 2022, @08:37AM (16 children)
Once again, the revenue stream is perpetual only until Congress chooses to amend or repeal the law authorizing the payments. Any future Congress can take up the matter whenever they choose by passing legislation that will modify or eliminate the revenue stream.
It is your opinion that the CFPB's funding is not legitimate. However, nothing in sections 8 and 9 of Article I restrict the length of appropriations with a single exception. We've already covered that exception, which limits appropriations for armies to two years in duration. There are no other restrictions imposed on how Congress may authorize appropriations. Here are the only places where appropriations are mentioned in Article I:
Neither of these restrict the length of appropriations except to fund armies. Restrictions on the length of appropriations are not imposed elsewhere in the Constitution, either. No other articles of the Constitution mention appropriations as this power is reserved solely for Congress. The court is imposing an arbitrary restriction on the length of appropriations even though Article III does not grant the judiciary any powers here. This ruling violates the separation of powers and amounts to legislating from the bench.
Again, if the Constitution restricted the length of appropriations for entities like the CFPB, you would certainly have said where in the Constitution this restrictions is imposed. Because you have not done so after multiple replies, we can reasonably conclude that you are full of shit and talking out of your ass.
(Score: 1) by khallow on Monday October 24 2022, @02:45PM (8 children)
Or the courts strike it down as unconstitutional. Guess which is happening first.
(Score: 0) by Anonymous Coward on Monday October 24 2022, @07:22PM (1 child)
Which will rely on the most tenuous application of nearly irrelevant case law or some originalist take on the Constitution or something. Iy is REALLY telling that you're getting so worked up over such a small issue. It is pathetically transparent that Big Money simply doesn't want to be held accountable and you have nothing else to argue with aside from trying to say it is unconstitutional.
As usual Republicans whine about legislating from the bench until it suits their interests. Very fascist, much wow. Khallow is a rightwing stooge promoting feudalism under the guise of liberty. What a jerk.
(Score: 1) by khallow on Monday October 24 2022, @08:46PM
Yes, they must be cheating or something. It's so weird how a scheme that spent so much effort to dodge accountability ended up being unconstitutional.
There's a reason they said this scheme was unique in the annuals of legislative failure.
(Score: 0) by Anonymous Coward on Tuesday October 25 2022, @05:05AM (5 children)
If this actually violates the Constitution, you should have no problem showing where the Constitution forbids this sort of funding mechanism. If I can quote Article I to show where appropriations for armies are limited to two years in length, surely you can quote the text that forbids this funding mechanism for the CFPB.
(Score: 1) by khallow on Tuesday October 25 2022, @01:29PM (4 children)
(Score: 0) by Anonymous Coward on Tuesday October 25 2022, @06:10PM (3 children)
Interesting, now show us the part of the Constitution that forbids abortion. Go ahead, we'll wait.
(Score: 1) by khallow on Tuesday October 25 2022, @11:57PM (2 children)
How about you perform that exercise? I'm not interested because it's not relevant.
(Score: 0) by Anonymous Coward on Wednesday October 26 2022, @10:53PM (1 child)
If you can't take responsibility for real rights being removed by Republicans then why should anyone give a shit about your whiny comolaints about the CFPB? Shows how bankrupt rightwing morality is, thanks pal.
(Score: 1) by khallow on Wednesday October 26 2022, @11:21PM
I can't take responsibility for Republicans any more than I can take responsibility for your irrationality. It's a non sequitur.
(Score: 0) by Anonymous Coward on Monday October 24 2022, @11:15PM (6 children)
And certainly if the constitution supported the many restrictions we have on free speech, we could easily point out where such restrictions are enumerated. And then this:
"time to time"... Nice and vague, ain't it? The interpretation of what is written seems to depend on personal bias.
(Score: 1) by khallow on Tuesday October 25 2022, @01:27PM (5 children)
Here, you're just weaseling that the underlying constitutional mandate is vague. Sure, it is. But the rules and regulations that sprung up from that are far from vague. It's not personal bias, but generations of rules. The court is quite right to strike down CFPB because it's evading those without cause.
(Score: 0) by Anonymous Coward on Tuesday October 25 2022, @11:21PM (4 children)
No, it had good cause, it was to prevent a partisan congress from defunding it, doesn't work of course, because any law can be repealed by congress.
The damn thing was just toothless featherbedding the bureaucracy anyway, good riddance to it. Unfortunately, consumer protection is dead
(Score: 1) by khallow on Tuesday October 25 2022, @11:55PM (3 children)
No, it's that other thing: a terrible cause. Seriously, you can't evade democracy legally just because there are partisan congresses out there.
(Score: 0) by Anonymous Coward on Thursday October 27 2022, @08:56PM (2 children)
Why? It's no different than giving the judges lifetime appointments. That's a complete bypass of "democracy". Let's sunset that first
(Score: 1) by khallow on Friday October 28 2022, @01:56AM
Which are allowed by the Constitution. Further, Judges can be impeached and removed by an elected Congress, for example. There's no explicit allowance in the Constitution to remove the head of the CFPB, remember? To do that, you basically have to revoke the charter of the CFPB first.
Funny how you just can't think about why this anti-democratic stuff sucks so much. Remove that programming and think for yourself!
(Score: 1) by khallow on Sunday October 30 2022, @04:04AM
Also, let us note that lifetime appointments is centuries old. They've had a long time to work out the problems.
Creating a permanent bureaucracy that deliberately bypasses what we've been using for centuries is not.
And of course, this is just a lousy whataboutism. As I've noted before, whataboutisms fail when your side does worse. The CFPB is very different from a judicial branch that was deliberately set up to be independent of the other branches of government. What really is the reason for a regulatory agency to be independent of both the legislative and executive branches?