Trump’s Shot to Defang Dodd-Frank Consumer Bureau: QuickTake Q&A

The Dodd-Frank financial reform law spawned more than a raft of regulations. It also created a new regulatory arm of government: the U.S. Consumer Financial Protection Bureau. Five years after being formed, the bureau has more than 1,600 employees, an operating budget of almost $680 million and offices in Washington, New York, Chicago and San Francisco. Its jurisdiction covers a wide variety of financial services marketed to everyday Americans, including mortgages, credit cards, student loans and payday loans. With Donald Trump in the White House, promising to make America more business-friendly, critics of the agency see an opening to weaken the new regulator on the block.

Republican lawmakers and the financial industry say its scope is too broad and its powers too strong, maybe unconstitutionally so. As an independent agency within another independent agency, the Federal Reserve, the CFPB has an unusual (though not unique) level of autonomy from executive and legislative oversight. Congress doesn’t control the agency’s budget -- there’s a fund within the Fed for that -- and the president can’t remove the agency’s director without cause. Even the Fed may not "intervene in any matter or proceeding" before the bureau’s director. In October, a federal appeals court ruled the bureau is "unconstitutionally structured" because the autonomy vested in the director marks a “gross departure from settled historical practice.” On Feb. 16, the court granted the CFPB’s request to reconsider that decision.