A court decision to make the Consumer Financial Protection Bureau’s director report to the president means that the statutorily independent agency must follow executive orders, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) argued, MorningConsult.com reported yesterday. The U.S. Court of Appeals for the D.C. Circuit’s recent decision means that the CFPB “is not, and may no longer be considered to be, an independent regulatory agency,” Hensarling wrote in a letter to CFPB Director Richard Cordray. “Consequently, it is also clear that executive orders applicable to executive agencies apply in full to the CFPB,” Hensarling said. On Oct. 11, the appeals court struck down elements of the CFPB’s current governance structure as unconstitutional. Under the 2010 Dodd-Frank Act, the CFPB was created as an independent agency, and the president originally could only dismiss the agency’s director for cause. The court ruling lifted that limitation, saying that it gave the director too much power. Hensarling pointed to four executive orders that President Obama and former President Clinton signed that should now impact the CFPB’s rulemaking process in light of the decision. These orders require executive agencies to conduct cost-benefit analyses of new regulations and report on their consultations with state, local, and tribal governments.
