The Consumer Financial Protection Bureau (CFPB) was created by the Dodd-Frank Act as an independent agency within the Federal Reserve System, with the purpose of regulating consumer financial products. The core mission of the CFPB, protecting consumers from bad actors, is important, but we should all be concerned about the unconstitutional structure of the bureau.

The House Financial Services Subcommittee on Oversight and Investigations recently held a hearing to examine the structure of the CFPB. As vice chairman of this subcommittee, I had the opportunity to speak with our panel of witnesses about the ways that the CFPB is wholly unaccountable to Congress.

In October 2016, a federal court found the CFPB’s structure to be unconstitutional. The bureau’s appeal of this ruling is ongoing; but separate from the legal battle, Congress has a duty to evaluate the structure of the CFPB, protect the separation of powers between our three branches of government and protect consumers from harmful federal overreach.

---

---

One of the biggest problems with the CFPB is that it does not rely on any appropriations from Congress to fund its operations. Instead, the bureau funds itself by drawing its operating expenses from the Federal Reserve, and Congress is expressly prohibited from reviewing the bureau’s use of its operating funds. What’s more, the Federal Reserve itself is not subject to congressional appropriations — meaning the CFPB is entirely outside the House’s power of the purse.

The power of the purse is the legislative branch’s most powerful check on the executive branch. It should bother all Americans that within the CFPB, unelected Washington bureaucrats can operate without any accountability to Congress.

---

---

Another problem with CFPB is outlined in the decision handed down by the U.S. Court of Appeals for the District of Columbia on Oct. 11, 2016. The opinion stated, “Because the CFPB is an independent agency headed by a single Director and not by a multi-member commission, the Director of the CFPB possesses more unilateral authority — that is, authority to take action on one’s own, subject to no check — than any single commissioner or board member in any other independent agency in the U.S. Government. Indeed… the Director enjoys more unilateral authority than any other officer in any of the three branches of the U.S. Government, other than the President.”

That’s right, the CFPB director has more unilateral authority than any other officer in any of the three branches of the federal government, other than the President. I think most people would be shocked to hear this.

Additionally, the Dodd-Frank Act mandates that courts give extra deference to the CFPB’s interpretation of laws, which reduces the power of the judicial branch to defend the Constitution.

During the Financial Services hearing I asked Ted Olson, former solicitor general and assistant attorney general within the U.S. Department of Justice, about the dangers of allowing a federal entity to have autonomy from the executive, legislative and judicial branches of government.

Mr. Olson said, “The framers of our Constitution vested the power to create laws in Congress, to enforce laws in the president and to adjudicate whether those laws have been violated in the judiciary. The framers of the Constitution felt very strongly that if you accumulated all those powers — the powers to create laws, to enforce laws and to adjudicate laws — in a single institution, that would be the very definition of tyranny.”

In order to protect consumers, we must protect the separation of powers, which is the bedrock of a government that is of the people, by the people and for the people. This will require fixing the current law to ensure the CFPB is subject to the same checks and balances as other federal agencies.