The cost of the unaccountable CFPB keeps getting higher
Fred Burnside
September 24, 2023
The Consumer Financial Protection Bureau faces a constitutional reckoning when the Supreme Court hears arguments on Oct. 3 in CFPB v. Community Financial Services Association of America. Trade associations successfully argued at the Fifth Circuit Court of Appeals that the CFPB’s structure violates the Appropriations Clause because the CFPB does not receive appropriations from Congress, making the agency unaccountable.
Why should you care? Because until congressional oversight becomes a reality, the CFPB will continue to adopt and enforce inconsistent, unpredictable positions that harm consumers and financial institutions alike.
Nowhere is the CFPB’s fickle regulation-by-hindsight more evident than in the campaign against so-called “junk fees.” Nobody likes paying fees, but the CFPB’s quest for simple proclamations over studied solutions creates more problems than it solves, harming the very people the agency claims to protect.
Let’s say you buy lunch with your debit card. At the time you put down your card, your bank’s best estimate — without knowing about any outstanding checks, upcoming pre-authorized payments, or the amount of a tip you will leave, if any — is that you have the money available to cover the meal. But by the time the transaction is actually paid (typically a few days later), your account balance may have turned negative. Maybe checks you wrote cleared just after you ate. Maybe the tip on that meal put you into the red, or other pending charges settled.
