republicans who are about to run the federal government face some crucial strategic questions, and one is how much of president obama<u+2019>s agenda to roll back through regulation and how much through legislation. a case in point is the consumer financial protection bureau, which has abused the law and whose structure was recently found unconstitutional. by all rights the bureau should be killed, and we<u+2019>re told the trump transition team is considering this and other options. the political problem is that killing the bureau would probably require 60 senate votes, and democrats would be able to portray themselves as defending <u+201c>consumer protection,<u+201d> which sounds better than it has turned out. reform options short of a death sentence could at least restrain some of the bureau<u+2019>s abuses. a panel of the d.c. circuit court of appeals recently said the bureau violates the constitution because it is run by one man<u+2014>director richard cordray <u+2014>who cannot be fired by the president except for cause. this violates the separation of powers requiring that the chief executive be responsible for everyone in the executive branch. independent agencies are typically run by bipartisan commissions as a check on unelected authority. the bureau has appealed that decision to the full d.c. circuit, and the issue may be headed for the supreme court. this is another reason for donald trump to send up a justice nominee as soon as possible. mr. trump should dismiss mr. cordray on his first day as president despite the appeal, but the bureau has other problems. one is that it is funded from the federal reserve based on a formula in the dodd-frank law that has resulted (surprise) in regular budget increases. so the bureau, which expects to burn through more than $600 million this year, has no need to justify itself to the president or congress for annual appropriations. this lack of accountability has led to outrageous abuses, such as its attempts to regulate car dealers though dodd-frank expressly said that wasn<u+2019>t a job for the bureau. last year rep. david scott (d., ga.) ripped the bureau<u+2019>s <u+201c>deceitful<u+201d> attack on auto lenders for alleged racial bias based on <u+201c>shamefully flawed<u+201d> information. the bureau sued banks for discrimination after guessing the race of borrowers based on their last names and addresses. internal documents reveal that the bureau gang knew their guesses were wildly inaccurate. so they discussed how to keep defendants they were smearing as racists from learning the truth. then there is its attack on payday lenders though government research showed borrowers want such services and suffer when they aren<u+2019>t available. or the time a federal judge tossed out the bureau<u+2019>s investigation of college accreditation because the bureau has no authority to conduct such an investigation. these abuses can be eliminated with a new director, but congress should move to restrain the bureau further. one idea would be to put it under the treasury, like the irs and comptroller of the currency, to make it more accountable to elected officials. it<u+2019>s also crucial to make the agency subject to annual discretionary appropriations so it must compete with other priorities. if the bureau can<u+2019>t be killed, it should at least be made constitutional and accountable to normal political oversight.
consumer financial protection rewrite - wsj
noauthor