The federal government employs over 20,000 bureaucrats at eight of the financial regulatory agencies, sub-agencies, and departments that regulate, dictate, and monitor the financial transactions of Americans. There are tens of thousands more at law enforcement, intelligence agencies, and Department of Justice that surveil and review our transactions.
Still, the latest financial fraud and cover-up by Wells Fargo Bank went unnoticed for years when the bank’s employees opened fake accounts to rake in millions of dollars in fees.
The failures of these supposed consumer and public guardians to uncover theses misdeeds is symptomatic of the Administrative State’s drift away from protecting the interests of the American people and toward a punitive ideologically-driven enforcement agenda.
On Oct. 11, a three-judge panel of the D.C. Circuit (all GOP appointees) struck a blow against this state-within-a-state, ruling that Sen. Elizabeth WarrenElizabeth Ann WarrenO'Rourke’s strategy: Show Americans the real Beto 2020 Democrats barnstorm the country for MLK weekend Kamala Harris picks Baltimore as headquarters for potential 2020 campaign: report MORE’s brainchild, the Consumer Financial Protection Board (CFPB), was illegally constituted. The agency concentrates too much power in the hands of one person – the agency’s director – without necessary checks of their power.
Writing the opinion for the majority, Judge Brett Kavanaugh came out swinging against bureaucratic overreach, writing: “This is a case about executive power and individual liberty. The U.S. Government’s executive power to enforce federal law against private citizens – for example, to bring criminal prosecutions and civil enforcement actions – is essential to societal order and progress, but simultaneously a grave threat to individual liberty.”
Kavanaugh continued that, “In order to preserve individual liberty and ensure accountability, Article II of the Constitution assigns the executive power to the President. The President operates with the assistance of subordinates, but the President acts as a critical check on those subordinates. That check provides accountability and protects against arbitrary decision making by executive agencies, thereby helping to safeguard individual liberty.”
The decision reads like a clarion call for the return of a system of checks-and-balances between the branches of government, resting ultimate power in the democratic will of the people.
Unfortunately, Kavanaugh like most enablers of the bureaucratic state’s addiction to power cannot bring himself to force the overreaching government to go “cold turkey.”
But the judge who came in like a lion went out like a lamb, ruling that if CFPB’s director serves exclusively as an at-will charge of the president then the Bureau’s breathtaking overreach would be okay.
But that is not enough. The harm these agencies do to economic productivity and individual liberty is real and growing more severe by the day.
The CFPB needs accountability for the same reason most police support the use of body-cameras: People act differently when they know they’re being watched. The CFPB is a strange agency. It isn’t subject to appropriations, instead deriving its funding from the Federal Reserve, and doesn’t have an SEC-like bipartisan commission structure. The CFPB isn’t accountable, and it behaves accordingly. Consider that while the CFPB was using questionable statistical modeling to allege widespread racial discrimination in auto loans, the Government Accountability Office (GAO) found evidence of racial and gender discrimination against CFPB employees. This agency needs a “body camera.”
Today, the Big Banks are still Too Big to Fail, imperiling our financial system and leaving taxpayers on the hook for yet another trillion-dollar bailout. The Fed continues to manipulate the economy in unseen but deeply felt ways that may well lift asset values for the few yet are little more than an economic “sugar high” in the absence of real pro-growth reforms for the many. And as disturbing as these macro effects are, the fed regulators who have failed us are actually snooping on our transactions and collecting reams of data about everyday Americans.
These tens of thousands of bureaucrats aren’t hunting terrorists – they are arming themselves with evidence about the money habits of ordinary Americans.
Even if the agency’s purposes are innocuous, it is extremely dangerous to concentrate such valuable data in the hands of government which has proven itself inept and negligent in protecting the data of its own employees from foreign and criminal elements who would not hesitate to use such information for nefarious purposes.
The DC Circuit’s soaring rhetoric proves as thin as the paper the decision was printed on when they continue to allow what they acknowledge to be an improperly checked agency to continue to operate, regulate, and snoop with impunity.
The decision confirms what we have known for too long: the courts, despite having the power of judicial review to ensure government does not grow beyond its constitutional bounds, will never dismantle the bureaucratic state that intrudes on the lives of millions of Americans and hamper our economy.
Instead, the people – through their elected representatives – must take on bureaucratic bloat sooner rather than later.
Newt Gingrich is the former Speaker of the House. Kyle Hauptman is the Executive Director of Main Street Growth Project, an advocacy group for smarter financial regulation.
The views expressed by authors are their own and not the views of The Hill.