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October 11, 2016

October 11, 2016 | News Releases on

Court Says CFPB Structure is Unconstitutional

The U.S. Court of Appeals for the District of Columbia ruled today that the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional.


In its ruling, the court focused-in specifically on the unaccountable nature of the CFPB’s leadership calling the structure “novel.” Judge Brett Kavanaugh warned that the bureau “poses a far greater risk of arbitrary decision making and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency."


The CFPB was created by the Dodd-Frank financial reform legislation passed 2010. Heritage expert Norbert Michel has called Dodd-Frank “one of the most inappropriately named laws ever enacted.” Michel said that today’s ruling “echoes the argument that Heritage experts and other scholars have been making since Dodd-Frank hatched the CFPB” and given the court’s ruling, he proposes that “now is the time for Congress to act and scrap the CFPB and start over.”


Furthermore, Michel argues that “proponents of Dodd-Frank and the CFPB never established any solid reason that the Federal Trade Commission, the Department of Justice and state regulators could not sufficiently protect consumers.”


Earlier this year, researchers from Heritage and other Washington, D.C. - based tanks collaborated to produce “The Case Against Dodd-Frank: How the Consumer Protection Law Endangers Americans.” The 198-page book analyzed weaknesses in Dodd-Frank and suggested a variety of reforms.


About the Author

Justin Posey Communications Manager, Institute for Economic Freedom and Opportunity and Legal Studies
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