Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

Senator Pat Toomey today at the SBC CFPB meeting addressing the likely Unconstitutional CFPB funding mechanism in Dodd Frank (Alex I'll take "Pending Supreme Decisions" for $200. !):

"In our constitutional system of checks and balances, only Congress has the
power to appropriate money. James Madison called this: “the most
complete and effectual weapon with which any constitution can arm the
immediate representatives of the people.”
But, the Dodd-Frank Act exempted the CFPB from appropriations. It
empowers the CFPB to simply take funds from the Fed, which is itself also
not subject to appropriations, thereby doubly insulating the CFPB from any
congressional control.

I acknowledge there are other financial regulators not on appropriations—
and we can disagree about whether they should be. But, it’s indisputable
that Congress has precisely zero leverage over the CFPB. It’s hard for me
to imagine our Founders intended an agency to have the power of the
legislative branch, and precisely zero accountability to the legislative
branch. And, in any case, clearly the CFPB is overreaching and doesn’t
care.

That’s why the Fifth Circuit recently found the CFPB’s funding structure is
unconstitutional. The court noted: “The Bureau’s perpetual insulation from
Congress’s appropriations power . . . renders the Bureau ‘no longer
dependent and, as a result, no longer accountable’ to Congress and,
ultimately, to the people.”

What can we expect from an agency designed to be unaccountable to
Congress, if not overreach and hubris? For example, under Director
Chopra, the CFPB unilaterally decided that Dodd-Frank’s grant of authority to prevent unfair, deceptive, or abusive acts or practices—known as
UDAAP—now includes controversial disparate impact liability. It announced
this change by fiat, without rulemaking. It ignored not only the text of Dodd-
Frank, but also the fact that Congress never contemplated that UDAAP
would encompass disparate impact. Congress took the UDAAP language
from the FTC Act. For nearly a century, the FTC never interpreted that
language to include discrimination or disparate impact.

Finally, the CFPB
willfully ignored the fact that Congress overturned the CFPB’s disparate
impact guidance for auto lending in 2018.
It’s extremely implausible to think that an agency that was dependent on
Congress for appropriations would engage in activity so clearly contrary to
Congress’ intent.

These examples are just some of the symptoms of an agency that’s out of
control and knows Congress can’t use the power of the purse to rein in its
overreach. That’s why I’m introducing legislation—along with Senator Hagerty—to place the CFPB on appropriations. The best way to make the
CFPB accountable to Congress is through appropriations.

Through its rulemaking, the CFPB can exercise legislative power. What’s
ambiguous about the first line in Article I of the Constitution: “All Legislative
powers herein granted shall be vested in a Congress of the United States”?

At the very least, Congress should carry out the responsibility that the
Constitution assigns to us, and exercise control over agencies like the
CFPB that exercise legislative power.

But that’s not all this legislation will do. It will also replace the agency’s
single director with a five-member, bipartisan commission, like the SEC and
FDIC. This structure will ensure that the CFPB considers a diversity of
voices when it forms policy. And it’s not a new idea. Bipartisan legislation to
convert the CFPB into a commission has been repeatedly introduced.

These accountability measures will help make the agency more
responsible, balanced, and measured. And Congress will have to accept
some responsibility for what the CFPB does.

What’s more, if Congress does not put the CFPB on appropriations, the
Supreme Court will likely force us to. The Court is expected to consider and
uphold the Fifth Circuit’s decision that the CFPB’s funding structure is
unconstitutional. If it does, I have no doubt Congress will act swiftly to
provide the CFPB with appropriate funding.
After all, Congress is
experienced at the appropriations process.
But, by acting now, through legislation, Congress can ensure the
smoothest possible transition. This is in the best interest not only of the
CFPB and Congress, but also consumers and the economy. That’s why I
call on all of my colleagues, Democrats and Republicans, to join me in
supporting this sensible legislation."