Cordray: Say, what this CFPB needs is more power

posted at 10:25 am on February 17, 2012 by Ed Morrissey

When Senate Republicans blocked the confirmation of Richard Cordray to run the Consumer Financial Protection Bureau, they did so in protest of the ambiguous and open-ended power granted to CFPB by the previous Democratic-controlled Congress.  Barack Obama blasted Republicans for obstructionism, defended Cordray as a mainstream, responsible choice to lead the CFPB, and gave him a recess appointment [see update below].  Now that he’s ensconced at the CFPB, Cordray’s first action is to demand even more power at CFPB, including new federal oversight on collection agencies:

The Consumer Financial Protection Bureau on Thursday sought to bring debt collectors and credit bureaus under its purview, marking the first time the often controversial industries would be subject to federal supervision.

Under its proposed rule, the CFPB would oversee the nation’s largest debt collectors, the primary credit reporting agencies such as Experian, Equifax and TransUnion, and other lesser-known consumer reporting agencies. It is the first attempt by the watchdog agency to define which businesses in the vast swath of nontraditional financial institutions will be subject to the same examination process as banks.

“This oversight would help restore confidence that the federal government is standing beside the American consumer,” CFPB Director Richard Cordray said in a statement.

There may be good reason to regulate debt collectors and so-called “fourth bureau” reporting agencies at the federal level.  If their businesses cross state lines, then federal jurisdiction would be easy to establish.  However, that kind of direction should come from Congress, not from unaccountable bureaucrats issuing “rules” to expand their bureaucratic fiefdoms.  In fact, that is exactly why we have a Congress and not just an executive branch — to ensure that the laws imposed on our nation come from the elected representatives of the people and not from self-appointed elites.

This demonstrates one of the most dangerous aspects of the 111th Congress and Barack Obama.  Both the Dodd-Frank and ObamaCare bills created shells for power rather than laws for enforcing.  Nancy Pelosi and Harry Reid filled both bills with ambiguities and assigned the executive branch agencies the task of specifying their own boundaries, which has the practical effect of not putting any boundaries on the executive branch at all.  Phrases like “The Secretary/Director shall determine” pepper both bills and punts the task of lawmaking to unelected bureaucrats — and in this case, to an administration all too eager to exercise diktat power over Americans.

Cordray is no moderate, and the two of the biggest products (in impact and in size) from Obama’s first two years as President represent radical departures from representative government.  This is just the latest example of it.

Update: I assumed that Hot Air readers would recall that this recess appointment has been hotly disputed and will likely have to be resolved by the courts, and that this post didn’t need a dissertation on that issue.  However, if you’d like to read what we have written on that topic, these posts will be a good starting point:


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