The story is a familiar one: Irresponsible consumers and rapacious borrowers collide in a frenzy of consumption that takes down the American economy and banking system. Only heavy-handed government regulation can rein in the excesses, providing comprehensive regulation of the consumer-credit economy and protecting vulnerable groups of Americans from exploitation by lenders who goad consumers to take on more debt than they can handle to sustain a consumerist lifestyle they can’t afford.
The Bureau of Consumer Financial Protection (“CFPB”), we saw yesterday, is a truly “independent” agency. Under the Dodd-Frank Act, the President appoints the CFPB Director with the advice and consent of the Senate. However, he may remove the director only for good cause. The CFPB is established “in” the Federal Reserve. The Fed’s Chairman is also non-removable except for good cause, and he in turn may not remove any officer of the CFPB—for good cause or (if the statute means what it says) for any reason whatever. That’s unconstitutional.