The Consumer Bureau Asks Congress to Fix It

Wayne A. Abernathy

Semiannual reports by Federal agencies tend to be boring reads.  Either they are dull propaganda pieces for how well the agency is doing, or they are tedious bureaucratic litanies of agency actions to meet statutory assignments.

Until this week, that was true for the semiannual report of the Bureau of Consumer Financial Protection (BCFP).  Still led by acting-Director Mick Mulvaney (who is also Senate-confirmed Director of the Office of Management and Budget), the Bureau’s latest report recommended that the agency be significantly restructured to make it more accountable.  Mulvaney’s basic argument is cogent and refreshing.  In short, he says “the Bureau is far too powerful, and with precious little oversight of its activities.”

Consider acting-Director Mulvaney’s enumeration of how the Bureau’s Congressional endowment breaches the Constitution’s fundamental separation of powers:

Per the statute, in the normal course the Bureau’s Director simultaneously serves in three roles: as a one-man legislature empowered to write rules to bind parties in new ways; as an executive officer subject to limited control by the President; and as an appellate judge presiding over the Bureau’s in-house court-like adjudications.

Besides raising the problem, the report also offers legislative remedies:

  1. Fund the Bureau through Congressional appropriations;
  2. Require legislative approval of major Bureau rules;
  3. Ensure that the Director answers to the President in the exercise of executive authority; and
  4. Create an independent Inspector General for the Bureau.

Next week the acting-Director is scheduled to appear before two committees of Congress, the House Financial Services Committee and the Senate Banking Committee.  The outspoken former congressman may convert those hearings into something even more interesting than his not-so-usual agency report.

Here is the link to the Bureau’s semiannual report.

Wayne A. Abernathy

Executive VP for Financial Institutions Policy and Regulatory Affairs

American Bankers Association


Federalist Society’s Financial Services & E-Commerce Practice Group

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