Justice Department Calls CFPB’S Structure Unconstitutional

In a brief filed on Friday (March 17) in a lawsuit against the Consumer Financial Protection Bureau (CFPB), the Justice Department declared that the agency’s structure is unconstitutional.

In the lawsuit, it’s stated that the current structure of the consumer watchdog agency actually provides it with too much power, CNBC reported.

The Justice Department argued that the director of the CFPB should be able to be removed at will by the President. However, the Dodd-Frank Act states that the head of the CFPB can only be removed in cases of “inefficiency, neglect of duty or malfeasance in office.”

CNBC noted that the CFPB declined to comment on the filing.

The agency and its director, Richard Cordray, have continued to be targets for lawmakers who want to reform the CFPB with an eye toward scaling back some of its vast powers.

Just last month, a pair of twin bills were introduced in the House and Senate — by Sen. Ted Cruz and Rep. John Ratcliffe (both from Texas) — to abolish the CFPB entirely by repealing Title X of the Dodd-Frank Wall Street Reform Act, which established the CFPB.

The move is justified, according to Cruz and Ratcliffe, since the CFPB does the exact opposite of what it was created to do.

“Don’t let the name fool you; the Consumer Financial Protection Bureau does little to protect consumers. During the Obama administration, the CFPB grew in power and magnitude without any accountability to Congress and the people, and I am encouraged by the actions President Trump has begun to take to roll back the harmful impacts of an out-of-control bureaucracy,” Cruz said.

Cruz and Ratcliffe have tried this one before — two years ago, the duo introduced a bill that also would have abolished the CFPB. This time around, though, Donald Trump as the sitting President has made Republicans much more confident in their ability to roll back parts of Dodd-Frank, or perhaps dismantle it entirely.