Judd Gregg: Elizabeth Warren and the CFPB

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When the Dodd-Frank financial regulation bill was first marked up, back in 2010, the conference of the House and Senate Banking Committees started at 2 p.m. one day and ended at 5:30 a.m. the next.

The mark-up went all night.

The Consumer Financial Protection Bureau (CFPB) was inserted in the bill, which passed on a partisan vote. All the Democrats voted for it.

{mosads}At the time — and later on the floor of the Senate — I pointed out that the CFPB’s director would be the most powerful bureaucrat in Washington since J. Edgar Hoover reigned over the FBI.


I was wrong. The director of the CFPB dwarfed Hoover as a rogue director of a rogue bureau.

The power invested in the director of the CFPB was, and still is, unencumbered by any limiting authority of those elected to govern.  

He is a person who under Dodd-Frank answers to no-one.

His agency receives its funding without any limitation or congressional oversight, as it has a “put” to the unlimited resources of the Federal Reserve rather than the congressionally-appropriated budget.

The director of the bureau is essentially an unelected, unaccountable czar of an agency that can exercise enormous power over the economy — and especially over the ability of people on Main Street America to obtain credit.

The authors of this section of Dodd-Frank intentionally facilitated this overreach because they did not want to be hampered by elected government.

A pre-Senate Elizabeth Warren — she was a professor at Harvard Law School at the time — designed the structure of the CFPB.

It appears she skipped the course on the concept of government being accountable to the people, which is at the core of our constitutional system.

The CFPB in its present form is an affront to our form of government.

There is nothing wrong with a bureau that is charged to do the various things that the CFPB is supposed to do, which involve allegedly helping consumers get credit.   

The problem is that this agency and its director were set up to be free from the control of the Congress. Congress’s fundamental obligation to oversee and fund such bureaus or agencies is short-circuited when it comes to the CFPB.

In structuring it in the manner written by now-Sen. Warren (D-Mass.), the law abrogated the idea of a government by the people, for the people and of the people.

Instead, it established an autocratic and unaccountable power center for people of Warren’s ideological persuasion — those who view our market economy as an enemy that must be managed by a chosen few.

In just this way, Richard Cordray, the first director of the CFPB,  came to be a person of immense and unaccountable power.  

He has used this position to pursue an extreme agenda, attacking the sources of capital and credit that fuel the engines of economic growth in America — especially the mid-level banks that fund the vitality of small business. 

He did not disappoint those of Warren’s political leaning with any lack of zeal. He used the power given to him expansively — much too expansively, in fact.

Now there is a fight over how Director Cordray should be replaced.

In another display of incredible disregard for those elected to govern, Warren and Cordray have tried to orchestrate what amounts to a mini-coup d’état. They want to retain control over the CFPB.  

Ignoring the obvious authority of President Trump — who was democratically elected, much to the displeasure of Warren and her acolytes — Cordray anointed his second in command to replace him.  

This action violated the statutes regarding replacement passed by the elected Congress.

When you have a purity of purpose — which is how Warren and her followers see themselves — following the law or staying within the bounds of the Constitution is not a matter of great concern.

It is not an exaggeration to point out that most demagogues and despots assert that their actions are done for the betterment of the people — and therefore they need not be subservient to anything as trivial or troublesome as elections or a constitution.

The creation of the CFPB as a rogue agency with a dictatorial leader is one of the most significant acts of malfeasance perpetrated on the American constitutional system since the Sedition Acts of 1798. 

The Congress has an obligation to bring this agency back under the control of elected persons, by retrieving its appropriations authority over it and by setting up an appointed oversight board to which the director answers.

Warren, meanwhile, owes an apology to all the students at Harvard who took her class.  

She clearly misdirected them as to the purposes of a constitutional government, and the power of the people to run it through their elected officials.

Or maybe Harvard owes the American people an apology for foisting on us Warren and her authoritarian ambitions.

Judd Gregg (R) is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee, and as ranking member of the Senate Appropriations Foreign Operations subcommittee.

Tags Bank regulation Elizabeth Warren financial reform Regulation Richard Cordray

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