A ju­di­cial slap to Congress

Daily Local News (West Chester, PA) - - OPINION - Ge­orge F. Will Ge­orge Will Colum­nist Ge­orge Will’s email ad­dress is georgewill@wash­post.com.

An­other small step was taken last week on the steep and wind­ing as­cent back to con­sti­tu­tional norms. The U.S. Court of Ap­peals for the D.C. Cir­cuit, the na­tion’s sec­ond-most im­por­tant court, did its ju­di­cial duty by rep­ri­mand­ing Congress for aban­don­ing con­sti­tu­tional pro­pri­ety. The court de­clared un­con­sti­tu­tional the un­prece­dented in­de­pen­dence that Congress con­ferred on the Con­sumer Fi­nan­cial Pro­tec­tion Bureau. This le­gal skir­mish about one as­pect of this one ten­ta­cle of the ad­min­is­tra­tive state may seem re­con­dite and triv­ial. It con­cerns, how­ever, two mo­men­tous mat­ters. One is the in­tegrity of the fed­eral gov­ern­ment’s Madis­o­nian ar­chi­tec­ture. The other is some­thing that not even the pre­scient James Madi­son could have an­tic­i­pated — Congress’ modern ea­ger­ness to di­min­ish it­self.

The CFPB is em­pow­ered to “reg­u­late the of­fer­ing and pro­vi­sion of con­sumer fi­nan­cial prod­ucts or ser­vices.” Be­ing able to de­fine fi­nan­cial prod­ucts, it can reg­u­late al­most ev­ery­thing touch­ing fi­nance, from mort­gages to fi­nan­cial ad­vis­ers to re­tire­ment plans — even car loans, al­though ex­pressly for­bid­den to do so. Act­ing like a free­wheel­ing lit­tle leg­is­la­ture, it con­cocts laws as it im­pro­vises stan­dards. It is au­tho­rized to “de­clare,” with scant con­gres­sional guid­ance, cer­tain busi­ness prac­tices “abu­sive,” “un­fair,” “de­cep­tive” or in­volv­ing “dis­crim­i­na­tion.” It does so by what­ever cri­te­ria it pleases, and im­poses penal­ties it deems ap­pro­pri­ate.

Un­til the court’s de­ci­sion last week, the CFPB, un­like any fed­eral in­sti­tu­tion cre­ated since 1789, was uniquely sovereign: Its di­rec­tor was ap­pointed by the pres­i­dent for a five-year term — longer than the pres­i­dent’s — and the di­rec­tor could be re­moved by the pres­i­dent only “for cause.” That is, only for “in­ef­fi­ciency, ne­glect of duty or malfea­sance,” not for rea­sons of pol­icy.

The court held that the CFPB is “un­con­sti­tu­tion­ally struc­tured” be­cause of its “novel agency struc­ture.” There are sev­eral agen­cies that are con­trolled by bi­par­ti­san com­mis­sion­ers who can only be re­moved for cause, and they are de­scribed as “in­de­pen­dent” agen­cies as a re­sult. But they all have five mem­bers, chosen from both par­ties. The court has just held, how­ever, that as cre­ated by Congress in the 2010 slap­dash Dodd-Frank leg­is­la­tion, the CFPB’s sin­gle di­rec­tor “en­joys more uni­lat­eral au­thor­ity than any other of­fi­cer in any of the three branches of the U.S. gov­ern­ment, other than the pres­i­dent.”

The court’s rul­ing makes the di­rec­tor sub­ject to pres­i­den­tial con­trol through dis­missal. An­other im­por­tant chal­lenge to the CFPB’s op­er­a­tions, cur­rently in a fed­eral district court, con­cerns Congress’ vol­un­tary aban­don­ment of its power of the purse: Dodd-Frank, which was passed with the sup­port of only three House Repub­li­cans and three Repub­li­can sen­a­tors, says the CFPB’s fund­ing shall be “de­ter­mined by the di­rec­tor” and shall come not from con­gres­sional ap­pro­pri­a­tions but from the Fed­eral Re­serve. Small won­der it spends lav­ishly on it­self. Sen. El­iz­a­beth War­ren, D-Mass., who while at Har­vard Law School pro­posed the CFPB, in­sists it is “highly ac­count­able” to Congress. The CFPB dis­agrees, hav­ing pro­claimed that its fund­ing from out­side the ap­pro­pri­a­tions process gives it “full in­de­pen­dence” from Congress.

A pe­cu­liar­ity of to­day’s pol­i­tics is the dis­pro­por­tion be­tween Democrats’ fer­vent de­sires to serve in Congress and their lack­adaisi­cal will­ing­ness to cede its pow­ers. Demo­cratic can­di­dates, both in­cum­bents and chal­lengers, are fight­ing fe­ro­ciously to re­main on, or get to, Capi­tol Hill. One won­ders: Why?

Their party is doc­tri­nally de­voted to marginal­iz­ing the leg­isla­tive branch in or­der to ex­pand the dis­cre­tion of the ad­min­is­tra­tive state as an in­stru­ment of ex­ec­u­tive power.

And the next pres­i­dent cer­tainly will be im­pa­tient with Madi­son’s sep­a­ra­tion of pow­ers. Pres­i­dent Hil­lary Clin­ton will be be­cause pro­gres­sives since Woodrow Wil­son have con­sid­ered this sys­tem an anachro­nis­tic im­ped­i­ment to en­er­getic gov­ern­ment pow­ered by an un­con­strained ex­ec­u­tive. Pres­i­dent Don­ald Trump will be anti-Madis­o­nian be­cause the sys­tem of checks and bal­ances will im­pede the sweep of his un­medi­ated fab­u­lous­ness.

The CFPB’s pro­gres­sive au­thor­i­tar­i­an­ism re­flects, in the lan­guage of the Hud­son In­sti­tute’s Christo­pher DeMuth, “reg­u­la­tory in­sou­ciance” made pos­si­ble by “leg­isla­tive ab­ne­ga­tion.” Both will con­tinue un­til con­ser­vatism reap­pears.

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