Abolishing the Consumer Financial Protection Bureau (CFPB) should rank high on the list as the Department of Government Efficiency (DOGE) seeks to cut reckless federal spending. This agency—created in the Wall Street Reform and Consumer Protection Act of 2010, known as Dodd-Frank, intended to address what many considered the causes of the 2008-09 financial crisis—has, in fact, harmed some Americans whom it was intended to benefit.
How CFPB Came to Be
Congress considered the creation of a consumer financial watchdog agency as the economy was recovering after the 2008-09 financial crisis, with Senator Christopher Dodd (D-CT) and Congressman Barney Frank (D-MA) spearheading the effort. Having both served in Congress for many years, teaming up to enact major post-crisis legislation represented their final congressional achievements before retiring.
Never mind that the Federal Trade Commission (FTC)—established in 1914—claimed to be “...the only federal agency that deals with consumer protection and competition issues in broad sectors of the economy.” The 2010 proposal to create a new consumer financial protector was a pet project of Senator Elizabeth Warren (D-MA)—then a professor at Harvard Law School—and she wanted to assure its inclusion in any post-crisis legislation.
Observers sensed that the major motivation behind her advocacy was her expectation of appointment as the initial director of what was to become known as the CFPB. But, when her nomination was imminent after President Obama signed the Dodd-Frank legislation, there ensued considerable public and congressional opposition to her appointment. She instead decided to declare her candidacy for an open US Senate seat, which she won and still occupies.
CFPB is a uniquely independent agency in two respects. First, it is organizationally housed within the Federal Reserve System (the Fed), from which it uniquely receives its funding. Second, by the terms of the original legislation, its director could not be dismissed by the President, except for cause (e.g., inefficiency, neglect, malfeasance). The US Supreme Court has ruled on both of these provisions.
Yeah, these guys are another gang of the state that is not helping but actually harming the people it is explicitly supposed to be helping. How odd is that? Every intervention into the economy is another of ”I know better than you how to spend your money.” If DOGE can get rid of this agency, nobody would notice because other agencies are already doing the tasks set out for the CFPB. Whoops.. perhaps the only one to notice it would be Warren.