Hensarling: Court Ruling Means Executive Orders Now Apply to CFPB
October 19, 2016 -
House Financial Services Committee Chairman Jeb Hensarling (R-TX) notified CFPB Director Richard Cordray in a letter today that a recent federal court ruling means the Bureau must now follow executive orders requiring agencies to ensure the benefits of their proposed regulations outweigh the costs.
In addition, the Bureau must now abide by executive orders requiring consultation with Indian tribal governments and state and local officials about its rulemaking activities.
“These executive orders issued by presidents Clinton and Obama are modest attempts to ensure that executive agencies are accountable to the American people and do not recklessly write regulations that damage our economy. The court’s ruling makes clear that the Constitution requires the CFPB to operate as an executive agency, making the Bureau obligated to fully comply with these executive orders,” said Chairman Hensarling.
Last week, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the CFPB is unconstitutionally structured but can continue to operate as an executive agency rather than an independent agency.
In his letter to Director Cordray, Chairman Hensarling summarized several of the executive orders that now apply to the Bureau and requested “written assurance that the CFPB will comply in full” before it issues any future final rules.
Chairman Hensarling has proposed legislation, the Financial CHOICE Act, that will increase transparency and accountability in the rulemaking process by putting in place cost-benefit analysis requirements for all financial regulators, including the CFPB.