Federal appeals court rules Congress upended separation of powers in creating CFPB
Congress has no constitutional authority to remove the Federal Reserve from the U.S. Treasury. The result of that reversal of law would lead to a new, and more dangerous, era of governmental power-grabbing.
It was in a meeting of the Financial Stability Oversight Council (FSOC) in early October that an aide to Senate Banking Committee Chairwoman Mary L. Murtha, D-Pa., raised this question.
“I wonder why the Fed is not taking over the U.S. Treasury,” said the aide, explaining why Congress had created the Consumer Financial Protection Bureau.
“I know it has some oversight duties,” he added, “but I don’t know if it has any authority over the Treasury.”
This was the first time such a suggestion had been made in the FSOC meetings, which also included those of the Senate Banking, Housing, and Urban Affairs Committee’s Housing Subcommittee chairman, Sen. Timothy F. Geithner, chairman of the U.S. International Trade Commission, and the House Banking Committee’s Financial Services Subcommittee chairmien, Rep. Spencer Bachus, Rep. Jeb Hensarling, Rep. Chris Collins, Rep. Spencer Bachus, and Rep. Spencer Bachus (R-Ala.).
After a few months of careful deliberation by the staffs of the three committees, FSOC staffers and two outside law firm partners—Mark B. Rosenberg and Kenneth W. Starr—the FSOC approved the proposal of an amendment to the Consumer Financial Protection Act (CFPLA, or the Dodd-Frank Act) that would have created a new agency to supervise financial literacy for consumers. The new bureau would have the broad authority to create rules and regulations for the financial industry.
FSOC has the authority to remove an agency from the U.S. Treasury if it determines “that the agency is no longer needed to carry out the duties of the Secretary