While the newest federal agency, the Consumer Financial Protection Bureau (CFPB), has been controversial for many reasons, its most troubling feature may simply be its unconstitutional structure. Its sole director reports to no one but himself, and, under the terms of Dodd-Frank, can be removed by the president only for cause. And it receives its funding not through Congress, but through the Federal Reserve. Not even the Fed has the authority to challenge its spending, however. Instead, the law says the Fed “shall” give the CFPB the funds it requests, up to 12 percent of the Fed’s total operating expenses. As of 2015, that meant the CFPB could demand up to $443 million in one year.
Last year, a federal appeals court, ruling against the agency, issued a stinging indictment of this structure in PHH v. CFPB. The CFPB, however, sought a rehearing en banc. In a typical federal appeals case, a three-judge panel will hear and rule on the matter. The losing party can request that the entire court—in this case, the 11 active judges of the D.C. Circuit Court of Appeals—to hear and rule on the case again. The courts rarely grant such requests, except when the matter is one of particular importance. In this case, the request was granted and the court will hear argument again on May 24, 2017.
Read more at https://www.cato.org/blog/please-stop-tyranny
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