The funding for the U.S. Consumer Financial Protection Bureau, which is meant to protect consumers in the financial sector, was deemed unconstitutional Wednesday by a federal appeals court.
Democratic Sen. Elizabeth Warren of Massachusetts, who was the driving force behind the agency’s creation, declared the judges’ ruling was “lawless and reckless.”
In the wake of the Great Recession that began in 2008, the CFPB was created by Congress and then-President Barack Obama as a financial watchdog, NPR reported.
It emerged from a 2007 paper by Warren when she was a professor at Harvard University. She proposed it as a financial version of the Consumer Product Safety Commission.
“This agency was Elizabeth’s idea, and through sheer force of will, intelligence and a bottomless well of energy, she has made, and will continue to make, a profound and positive difference for our country,” Obama said in July 2011 when he appointed the agency’s first director, according to The New York Times.
Trending:
The intent of the CFPB was to protect Americans from being taken advantage of by banks, loan structures, credit card companies and the financial sector in general, according to NPR.
But GOP leaders and Wall Street lenders have been fighting the agency for years, arguing that it has too much unchecked power, according to CNN.
For example, the CFPB had made banks return more than $12 million to consumers at the time of the 2017 report.
“Republicans argue it’s a ‘rogue’ agency because it’s not funded by Congress, and it’s run by a single director who can’t be fired by the president at will,” CNN said at the time.
Do you think the court got this one right?
Yes: 0% (0 Votes)
No: 0% (0 Votes)
That issue was at the heart of the ruling Wednesday by the three-judge panel of the 5th U.S. Circuit Court of Appeals.
The judges said that because the CFPB receives its funding from the Federal Reserve and not from Congress, the funding structure is unconstitutional, Politico reported.
The three judges behind the decision, Judge…
Source
Staff