What’s the CFPB ruling mean? Not much, says Elizabeth Warren

by Ryan Smith12 Oct 2016
A federal appeals court ruled yesterday that the structure of the Consumer Financial Protection Bureau was unconstitutional. So what does that mean for the businesses regulated by the CFPB? According to Sen. Elizabeth Warren, not much.

The US Court of Appeals for the District of Columbia ruled yesterday that the CFPB’s director wasn’t sufficiently answerable to the president. That, the court ruled, was a violation of the Constitution’s separation of powers. But Warren (D-Mass.), the architect of the agency, criticized the decision, which she said “bizarrely relies on a mischaracterization of my original proposal for a new consumer agency.” Warren said the decision “will likely be appealed and overturned.”

“But even if it stands, the ruling makes a small, technical tweak to Dodd-Frank and does not question the legality of any other past, present or future actions of the CFPB,” Warren said.

That’s not far from the truth. While Republicans have long demanded that the agency’s single director be replaced with a bipartisan panel, the ruling didn’t order any sweeping changes to the CFPB’s structure. While the court’s decision did say an agency headed by a single director could pose “a threat to individual liberty,” it didn’t specifically order that the director be replaced by a committee. Instead, the court merely ruled that the president needed the power to remove the director at will.
Currently, the president can only remove the director of the CFPB for cause.
Read more: In her statement on the ruling, Warren insisted that the agency was “highly accountable to both Congress and the President” – which isn’t entirely accurate. Congress doesn’t even control the agencies funding, which comes directly from the Federal Reserve.

But Warren defended the agency, saying that “continued Republican efforts to transform the agency’s structure or funding should be seen for what they are: attempts fostered by big banks to cripple an agency that has already forced them to return over $11 billion to customers who have been cheated.”


  • by | 10/12/2016 1:32:02 PM

    Elizabeth Warren needs to be FIRED with no PENSION.

  • by Vote Trump | 10/12/2016 2:32:59 PM

    I don't think Elizabeth Warren has a clue about the real world of mortgages. I don't have a dog in the fight, but it really bothers me when people in power don't have a clue. You can't cheat people who enter an agreement and later blame someone else for their own mistakes. Consumers need to be more responsible, even after a mortgage closing. The CFPB needs to create a level playing field where borrowers are able to be more responsible. When a borrower maximizes their borrowing power by spending the most allowed by a mortgage originator on their debt ratios, why can that same borrower go and spend additional debt to increase their debt ratios with NO INCOME VERIFICATION immediately after the mortgage mortgage is closed? The CFPB is a big joke and so is the FRANK-DODD DISASTER! Consumers do not like anything about it! VOTE TRUMP!!!

  • by | 10/12/2016 2:51:15 PM

    If in fact the banks have returned 11 billion, they have easily recouped that and more in the new increased fees that are charge across the country allowed by the CFPB and Dodd-Frank.


Should CFPB have more supervision over credit agencies?