It’s no secret that one of the most basic surviving planks in what is left of the GOP platform is to shrink and defund any regulatory body that could impact large business interests in pursuit of profits. The Trump administration, dismissing the significance of climate change and the impact of environmental emissions (land, water and air), was deeply enmeshed in shutting down the Environmental Protection Agency as well as either defunding or placing senior director committed to deregulation in charge of various federal agencies charged with protecting consumers. The federal government is thousands of employees short as it attempts to deal with everything from shutting down carbon emissions to controlling understaffed mega-trains with outdated safety rules and equipment. Like the huge environmental disaster caused by the derailment in Palestine, Ohio.
But outside of a very bizarre commitment to fighting a mysteriously ambiguous culture war, mostly masquerading as personal control over education but in reality a giant meme for White Christian nationalism, the GOP is attempting to purge federal regulatory agencies out of existence, especially where they are not dependent on Congress for funding. Thus, the issue is whether an agency that is financially self-sustaining without relying on Congress for budgetary support can even exist. This case is now before the US Supreme Court and centers on a specific federal agency – the Consumer Financial Protection Bureau (CFPB), created and funded by the Federal Reserve in response to the Wall Street subprime market crash in 2007/08. CFPB vs. Community Financial Services Assn. of America.
As Los Angeles Times writer, David Savage notes (February 28th), the ramifications of this case are truly huge: “The case involves both a high-level dispute over the Constitution’s separation of powers and a practical and political divide over the agency… The CFPB was championed by Democrats, including now-Sen. Elizabeth Warren, to protect consumers and borrowers from deceptive and unfair practices by banks and mortgage lenders. It has been opposed by much of the lending industry and many Republicans.
“The current dispute began as a challenge to a proposed regulation of payday lenders. In ruling for the lenders, the three judges of the 5th Circuit, all appointees of President Trump, said it violated the Constitution to shield the bureau from an annual fight over its appropriation… Judge Cory Wilson said the ‘bureau’s perpetual insulation from Congress’ appropriations power, including the express exemption from congressional review of its funding, renders it ... no longer accountable to Congress and, ultimately, to the people.’… The 5th Circuit ruling, however, did not immediately affect the bureau’s funding or operations as the parties continue their legal fight.
“The Democrats who wrote the Dodd-Frank Act in 2010 tried to protect the bureau from political interference from the White House or Congress. The director was given a semi-independent status, and the bureau was authorized to obtain up to 12% of the annual revenue of the Federal Reserve for its operating expenses… Last year, the bureau used $641 million of the $734 million that was available to it.
“The Supreme Court’s conservatives have cast a skeptical eye on the bureau. Three years ago, the justices in a 5-4 decision rejected the independent status of the director and ruled that person could be removed by the president for any reason, including political differences… The majority in the case of Seila Law vs. CFPB consisted of the five Republican appointees, and four Democratic appointees dissented… The court, now with six Republican appointees, will consider the funding issue in the case of CFPB vs. Community Financial Services Assn. of America.
“State attorneys for West Virginia and 16 other Republican-led states urged the court to rule against the CFPB, calling it a ‘toxic blend of broad power and unchecked autonomy.’ They said states play a lead role in protecting consumers, and the CFPB has proved a ‘failed experiment.’…California Atty. Gen. Rob Bonta and his counterparts from 20 Democratic-led states said the court should remove the cloud that hangs over the bureau… ‘The CFPB plays a critical role in advancing consumer protections and regulating the financial services industry,’ he said. ‘The misguided 5th Circuit Court decision, if allowed to stand, threatens to upend over a decade of important enforcement and regulatory work and throw the consumer financial markets into turmoil.’
“A high court ruling affirming the 5th Circuit could have a ‘radical and catastrophic impact,’ said Lauren Saunders, a director of the National Consumer Law Center, and ‘cause chaos in the marketplace’ if 11 years’ worth of lending regulations were invalidated… In her appeal, Prelogar argued that throughout American history, Congress has set up agencies that were funded by fees and rates, not an annual appropriation. She cited early examples of the Post Office, the Patent Office and the U.S. Mint.
“In the 20th century, Congress adopted a similar approach for funding the Federal Reserve, the Federal Deposit Insurance Corp. and the National Credit Union Administration… Prelogar also noted that a large part of the federal budget consists of mandatory spending for authorized programs like Social Security and Medicare that do not depend an annual appropriation. In fiscal year 2021, she said Congress authorized $4.8 trillion in such mandatory spending out of approximately $7 trillion in total spending.
“In creating the CFPB, she said Congress did what the Constitution requires by authorizing the bureau to spend funds collected by the Federal Reserve… ‘Courts have no license to depart from the text and history of the constitutional provisions adopted by the founders in pursuit of their own views about the proper structure and funding of administrative agencies,’ she said.” You have to ask yourself whether the GOP’s all-out effort to place “culture wars” front and center in their quest for elective office is in reality just a smoke screen catering to a vast MAGA constituency to cover up their effort to solidify control in the hands of the nation’s richest elites… as the expense of the rest of us. Their de facto choices are stark: plutocracy and/or theocracy?
I’m Peter Dekom, and more often than not, that which appears to be really is… if you just look hard enough.
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