The Consumer Financial Protection Bureau is coming under fire once again for its constitutionality, this time as the subject of a federal lawsuit filed this week.
The suit, filed by a Texas bank and two free market advocacy groups, alleges that the January recess appointment of the bureau’s director, Richard Cordray, was not constitutional, reports the L.A. Times.
It’s not a new allegation, but the suit against the federal agency has brought the issues back into headlines this week.
House Financial Services Committee Chairman Spencer Bachus weighed in following the announcement of the suit, urging reform for the agency and its leadership structure.
“There is no question the [CFPB]—by the design of Dodd-Frank Act supporters—lacks accountability and transparency,” Bachus said in a statement. “As it is currently structured, the CFPB is one of the most powerful and least accountable agencies in all of Washington.”
A lawsuit was filed in federal courte June 21 challenging the constitutionality of the Dodd-Frank Act. Bachus stressed the need for change in the agency’s leadership structure so that it operates under checks and balances to promote accountability.
“A bipartisan commission would help ensure that CFPB rules are balanced, fair and reasonable. It also promotes continuity in rulemaking by preventing a new director from unilaterally reversing the decisions made by a previous director,” he said. “This is a structure that has worked well for nearly every other regulatory body in this country and will work for the CFPB.”
Written by Elizabeth Ecker