The Dodd-Frank legislation is under assault. Don’t look for cannon fire or sonic blasts. It’s a quiet battle making its way through the courts and raises a small point that could topple the entire edifice. And don’t the money lenders know it?
In 2010, the financial reform law known as Dodd-Frank passed and among other things, it created the Consumer Financial Protection Bureau (CFPB). CFPB is the agency charged with ending speculation on derivatives (think mortgage bubble), giving shareholders the power to oust corporate directors and forcing companies to disclose payments to foreign governments in their pursuit of gas and oil projects. (“Dodd-Frank,” by Paul M. Barrett, Bloomberg Businessweek, April 25-May, 2016, pg. 42.) All good stuff. Of equal note, the director of CFPB, while appointed by the US President, isn’t beholden to any branch of government. Its funding comes from the Federal Reserve and its structure, with a single, powerful director, is similar to that of The Social Security Administration, the Office of Special Counsel and the Federal Housing Finance Agency. (Ibid pg. 42)
With its considerable policing powers, the CFPB, has raised the ire of high finance. Under the leadership of its director, Richard Corday, corporations like Bank of America, Capital One, Citigroup and JPMorgan Chase have paid billions of dollars in fines for infractions. Now these businesses have joined forces with MetLife, a large insurance company, in its law suit against the agency. The company contends CFPB’s structure “violates the constitutional principal of separation of powers because its director, Condray, can’t be easily ousted by the President and isn’t accountable to Congress.” (Ibid pg. 42.)
In fact, the director can be ousted but only for reasons of neglect of duty or serious misconduct. (Ibid pg 42.) That’s not good enough for the corporate world. Their aim is to turn the director’s office into a political football and render it ineffective. Sadly, the judicial panel appointed by Republican presidents seems to be lending a sympathetic ear. If corporations win this battle, the public loses.