However, Warren added, “That is not the whole story. Lenders have deliberately built tricks and traps into some credit products so they can ensnare families in a cycle of high-cost debt.” The agency that she proposed would serve as an equalizer, putting some heft on the side of consumers, who couldn’t be expected to outsmart a system designed to thwart them. To do that, experts would stand in as proxies for consumers.
It wasn’t just that the CFPB’s framers doubted individuals’ ability to parse financial offerings. Given that the institutions the CFPB would limit were politically powerful, its creators also doubted that CFPB could survive a political fight. Even if voters were sufficiently motivated and clued-in to fight an attempt to weaken the agency, the thinking went, it would be yet another unfair fight: They’d be rolled by moneyed donors who have captured Congress and the presidency. The only way to protect the agency, and by extension the consumers, was to insulate the CFPB from interference by keeping those two political actors as far from the agency as possible.
As a result, the Democrat-controlled Congress made it an independent agency, like the Federal Reserve Board or the Federal Election Commission. While its director is appointed by the president and confirmed by the Senate, he or she serves a set term and (probably) can’t be fired by the president. Additionally, the CFPB is funded not by Congress, which could decide to close its wallet and starve the agency, but by the Federal Reserve.
There are two predominant, separate objections to the CFPB among conservatives. One is that it serves an unnecessary purpose, that regulation is generally a bad thing, that the CFPB will stifle financial institutions, and that individuals ought to be left to make their own choices. Trump, for example, tweeted, “The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick. Financial Institutions have been devastated and unable to properly serve the public.” (As Jonathan Chait notes, Trump’s concurrent boasts about the booming Dow appear to contradict his claim.)
The second is that regardless of the substance of what the agency does, the way it is set up—shielded from presidential and congressional oversight—is concerning to anyone who believes that the government in general, and unelected bureaucrats in particular, are prone to abusing their power and the people. “It is not inherently ‘anti-CFPB’ to be appalled by the way the body was established, any more than it is ‘anti-children’ to believe that any legislation aimed at helping minors must pass through both houses and be signed by the president,” argues Charles C.W. Cooke.
As this week has proven, the 2010-era Democrats were correct to suspect that future elected officials would attempt to meddle with the CFPB if given the chance. At the start of his administration, Republicans tried to get Trump to fire Cordray, which might not have been legal, but in any case the president decided to wait for Cordray to leave. Once Cordray announced his departure, Trump appointed Mick Mulvaney, the head of the Office of Management and Budget, to be the interim director of the CFPB in addition to his OMB duties.