The following article by Linda Qiu was posted on the New York Times website November 28, 2017:
WASHINGTON — Alongside a legal showdown over who will lead the Consumer Financial Protection Bureau, the agency also faces renewed criticism — including from the official overseeing the bureau as the case is being considered.
Confusion has reigned as two acting directors have claimed the title: Mick Mulvaney, who was appointed by President Trump, and Leandra English, designated by the departing director of the bureau, Richard Cordray, as his successor.
Ms. English, the deputy director of the consumer bureau, filed a lawsuit on Sunday seeking to block Mr. Mulvaney, the White House budget chief, from taking control. A federal judge on Tuesday said that Mr. Mulvaney could lead the agency.
In a news conference on Monday, Mr. Mulvaney continued to criticize the watchdog he has been asked to supervise.
“I think it is wrong to have a completely unaccountable federal bureaucracy,” he said. “By the way, I’m just learning about the powers that I have as acting director. They would frighten most of you. They would probably worry you to think how little oversight Congress has over me.”
Republican lawmakers widely share that assessment, saying that “there is nothing bipartisan” about the agency, that it operated with “very little transparency, really no oversight to Congress” and that it did not “add much at all to consumer protection
It is true that the agency was granted significant autonomy under the Dodd-Frank Act of 2010, and specifically intended to be insulated from interference by the industry it oversees. But the claim that there is no oversight whatsoever is exaggerated, and the idea that it does little to protect consumers is inaccurate.
“The nature of the C.F.P.B.’s accountability mechanisms does not lend itself to quick and easy sound bites, but that does not mean it does not exist,” said Susan Block-Lieb, a law professor at Fordham University who has written about those concerns.
Those who say the consumer bureau is a rogue agency often take issue with its leadership structure and financial independence.
A single director oversees the bureau, serving a five-year term. Most other independent financial regulators are governed by a board or commission with members who serve staggered terms and have differing political beliefs.
Like the majority of financial regulators, the agency does not rely on Congress for funding. Rather, that backing comes directly from the Federal Reserve.
Still, the agency’s financial independence from Congress is not the same as “no oversight” at all. Congress holds the consumer bureau accountable in several ways, as outlined by the Consumer Federation of America. Its director must be confirmed by the Senate and is required to testify to House and Senate committees twice a year. Each year, the consumer bureau is asked to submit reports to Congress and undergo an audit from the Governmental Accountability Office, an investigative agency in the legislative branch.
The consumer bureau is also required to coordinate with other financial regulators in the rule-making process, and their objections must be included in the record. For example, when the bureau issued a rule to allow for more class-action lawsuits against financial institutions, the Office of the Comptroller of the Currency weighed in.
There are also ways to override the agency. The Financial Stability Oversight Council, an organization also created by Dodd-Frank that is led by the Treasury secretary, can veto any rule established by the consumer bureau if it has a two-thirds majority and if the rule would imperil the financial system. No other agency’s rules can be tossed out in this way, according to the Consumer Federation.
And while Congress does not have similar veto power, it was able to strike down last month an arbitration rule from the bureau that would have allowed millions of Americans to band together in class-action lawsuits against Wall Street firms. It can also dissolve the agency altogether through legislative action.
The claim that the consumer bureau “doesn’t add much at all to consumer protection” is inaccurate. The Dodd-Frank Act did not confer new financial regulatory powers so much as it consolidated the powers previously held by other agencies into the consumer bureau. But before the financial crisis that prompted the creation of the bureau, Ms. Block-Lieb said, “regulators were asleep at the switch and there were so many of them, it created a collective action problem.”
In its six years of existence, the agency has gone after debt collectors and payday lenders, set rules to protect mortgage borrowers and extracted nearly $12 billion for 29 million consumers in compensation. Ms. Block-Lieb called the criticism of the Consumer Financial Protection Bureau doing little “absurd.”
“Are they perfect? Of course not,” she said. “But they’re important.”
View the post here.