CFPB ruled “unconstitutional”

The Consumer Financial Protection Bureau (CFPB), which has been given extensive oversight regulatory capabilities in the auto loan and leasing sector, stands accused of over-reaching itself.

A court in Washington, D.C has ruled that the structure of the CFPB is unconstitutional. It took issue with the inability for other arms of the government to review or rebuke the bureau’s judgements or actions and the unilateral power imbued in the CFPB’s director, currently Richard Cordray.

The judgement states: “The director enjoys significantly more unilateral power than any single member of any other independent agency. By ‘unilateral power,’ we mean power that is not checked by the President or by other colleagues.

“Indeed, other than the President, the director of the CFPB is the single most powerful official in the entire US government, at least when measured in terms of unilateral power.”

Critics, including the National Automobile Dealers Association, are calling for greater oversight of the CFPB, a reduction in its powers, or even closure of the agency, claiming that it is taking on a much broader regulatory role than was intended.

In a statement, the CFPB said: “The bureau respectfully disagrees with the court’s decision. The bureau believes that Congress’s decision to make the director removable only for cause is consistent with Supreme Court precedent and the bureau is considering options for seeking further review of the court’s decision. In the meantime, as the court expressly recognized, the bureau will continue its important work.”