A rare piece of good news from Congress is that the Financial Services Appropriations bill changes the method for funding the Consumer Financial Protection Bureau (CFPB). The Dodd-Frank bill funded the CFPB through the Federal Reserve. This allowed the CFPB to avoid having to go to Congress to ask for and justify their funding—which made it harder for Congress to perform effective oversight. Allowing a federal agency to receive funds outside of the congressional process violates the framers’ intentions that Congress would exercise control over the Executive Branch and federal departments via the power of the purse.
Acting CFPB Director Mick Mulvaney—who joined Campaign for Liberty Chairman Ron Paul in supporting efforts to close the agency when they were in Congress—has tried to focus the agency on pursuing legitimate cases of fraud and other crimes within the agency’s backlog. Mulvaney’s efforts will be aided by the recent resignation of Leandra English, who was appointed as the CFPB’s Deputy Director at the end of the Obama administration and supported using the agency as a tool to skirt Congress by imposing new regulations on the financial services industry.
Kathy Kraninger, President Trump’s nominee to take over for Mulvaney, is likely to continue in Mulvaney’s footsteps. However, there is no guarantee that a future CFPB Director will not revert to the previous principles of overregulation that harm small banks and credit unions. That is why it is so important that Congress asserts its constitutional authority to hold this agency accountable—at least until there are the votes in Congress to repeal this unconstitutional bureaucracy.