Chairman Hensarling Questions Legality of CFPB FundingPosted by on March 12, 2013
In January, a federal court held that the Senate was not in recess when President Obama made three appointments to the National Labor Relations Board (NLRB). In deeming those appointments unconstitutional, the court invalidated decisions made by the NRLB during the illegal appointments.
While the court ruled only on the NLRB appointments, Richard Cordray, the President's nominee to head the Consumer Financial Protection Bureau (CFPB), was appointed at the same time and in the same manner as the unconstitutional NLRB appointees. Chairman Hensarling anticipates that a federal court will soon reach a similar conclusion with respect to the validity of Mr. Cordray's appointment.
Given that the Dodd-Frank Act authorizes the Federal Reserve to fund CFPB only at the request of the CFPB's director, the circumstances under which funds were transfered from the Federal Reserve to the CFPB must be called into question.
Read Chairman Hensarling's letter to Chairman Bernanke questioning the circumstances under which the Federal Reserve may lawfully fund the CFPB's operations.