A Feb. 16, 2017, ruling by the U.S. Court of Appeals for the District of Columbia Circuit granted the Consumer Financial Protection Bureau the right to appeal an earlier decision by the court against the government agency. The court had ruled the bureau's very existence was in violation of the U.S. Constitution. Established as part of 2010 Dodd-Frank Act, the CFPB has broad authority to enforce financial laws. Its autonomy and potential for legislative overreach has been a matter of concern on Capitol Hill.
In April 2016, PHH Corp. and concerned parties challenged the CFPB's constitutionality. The petitioners alleged the CFPB and select government entities such as the Federal Communications Commission "collectively constitute a headless fourth branch of government." Its power and lack of presidential supervision, poses a "significant threat to individual liberty and to the constitutional system of separation of powers and checks and balances," plaintiffs stated. They cited a $109 million order by the CFPB against PHH Corp. as an example of legislative overreach.
"In seeking to vacate the order, PHH argues that the CFPB's status as an independent agency headed by a single Director violates Article II of the Constitution," plaintiffs stated. The court ruled in their favor in October 2016, but agreed to reconsider the ruling on Feb. 16, following the CFPB's appeal.
The CFPB has received harsh criticism on Capitol Hill, most recently from Sen. Ted Cruz, R-Texas, and Rep. John Ratcliffe, R-Texas, who introduced two bills Feb. 14, 2017, designed to eliminate the government agency.
Sen. Cruz calls for eliminating the CFPB in S.370; Rep. Ratcliffe's bill, H.R. 1031, recommends eliminating Title X of the Dodd-Frank Act, which formed the basis for establishing the independent bureau. "The legislation that Rep. Ratcliffe and I are introducing today gives Congress the opportunity to free consumers and small businesses from the CFPB's regulatory blockades and financial activism, which stunt economic growth," Cruz stated. "While there's much more to do to scale back the harmful regulatory impositions of Dodd-Frank, this legislation takes a critical step in the right direction."
Rep. Ratcliffe added, "The CFPB's lack of accountability to the American people was quickly evidenced when – contrary to its name – it ended up hurting many of the very folks it was intended to help. While Sen. Cruz and I have been sounding the alarm on the CFPB's federal overreach for some time now, I'm optimistic at our renewed chances of advancing this effort with a willing partner in the White House."
S.370 calls for eliminating the CFPB but does not offer alternative consumer protections. H.R.1031 was issued without any text other than its title: "To eliminate the Bureau of Consumer Financial Protection by repealing title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as the Consumer Financial Protection Act of 2010."
Before the CFPB's inception, consumer protection was a collective effort of disparate government agencies with differing levels of authority. "It's hard to imagine how repealing the CFPB would cut back on bureaucracy, when you consider how many agencies were formerly responsible for consumer protection," said a financial analyst familiar with the proceedings. "In fact, one of CFPB's biggest benefits is its resourcefulness in providing a one-stop-shop and faster remediation for a range of consumer credit and banking issues."
The analyst additionally noted that the CFPB is more than just a complaint bureau; it provides practical and educational resources to consumers, as well as data, research and compliance guidelines to business owners. If the CFPB were eliminated, a number of government agencies would continue to provide guidance on various consumer protection issues. These include the Office of the Comptroller of the Currency, Office of Thrift Supervision, National Credit Union Administration, Federal Reserve Board, Federal Deposit Insurance Corp., Internal Revenue Service, Federal Trade Commission and several more.
As proposed legislation makes its way through Congress, and the D.C. Circuit Court prepares to revisit the CFPB's constitutionality, consumer advocates point to the CFPB's accomplishments and remain cautiously optimistic about the agency's future.
"Will the agency that in a few short years has saved consumers $12 billion – and deterred a slew of rip-offs, scams and schemes that banks and financial predators avoided for fear of the CFPB – be able to continue to do its job?" said Robert Weissman, President of Public Citizen. "Or will the big banks get their way and have the agency neutered?" 
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