FedSoc Blog

Writing for The Hill, Alan Charles Raul, a partner at Sidley Austin who served as vice chairman of the Privacy and Civil Liberties Oversight Board, offers his concerns about the newly created Consumer Financial Protection Bureau:

The Department of Justice’s Office of Legal Counsel opined recently that since most of the Senators weren’t around during their pro forma sessions, the Senate wasn’t really in a position to advise and consent regarding the President’s nominees. But OLC’s opinion never actually concluded that the specific recess appointment of Richard Cordray to be Director of the Consumer Financial Protection Bureau was constitutionally valid. This raises serious issues for anyone concerned about excessive concentration of government power. 

The reason the OLC opinion doesn’t address whether the Senate was available to consider Mr. Cordray’s nomination is obvious. The Senate did in fact consider Mr. Cordray’s nomination. On December 8, 2011, the Senate provided President Obama with all the advice he needed and rejected cloture on Cordray’s nomination by a 53-45 vote.

The Senate’s problem with Cordray was not at all personal, but rather, was a matter of principle involving serious constitutional concerns about the new agency itself. Sen. Richard Shelby (R-Ala.), wrote to President Obama on May 5 calling on him to support structural changes to the CFPB that would enhance oversight and make the new agency more accountable. As Shelby as said, “Unless Congress enacts reform, it is only a matter of time before this concentration of power is abused or misused to the detriment of American businesses and consumers.”

 So whether there was a constitutionality sufficient “recess” to appoint Mr. Cordray is a red herring – it is the director’s unchecked power that is the fundamental problem. The new agency simultaneously offends the constitutional authorities – and responsibilities – of both the Congress and the President. And it is no cure that both branches acquiesced in the infringement of their own authority. The Dodd-Frank legislators simply let their good intentions blind them to the need for respecting traditional checks and balances.

In December 2010, C. Boyden Gray and John Shu expressed similar misgivings about Dodd-Frank in an article they published in Engage, FedSoc's practice journal.  As they wrote in their introduction:

There has been much debate over whether Dodd-Frank will accomplish its stated intent, but there is also a growing exchange about whether the law is constitutionally infirm, primarily due to separation of powers, vagueness, and due process. Central to this discussion is the fact that Dodd-Frank grants bureaucracies broad and unchallengeable discretionary authority; we query whether the Act provides effective oversight by any branch of government—the President, Congress, or the Judiciary.