Ken Paxton Leads 14-State Call To Defang The Consumer Financial Protection Bureau
Ken Paxton is taking on the federal Consumer Financial Protection Bureau.
The embattled watchdog agency – which was established in the wake of the financial crisis to police financial service providers – is seeking penalties against Mississippi-based payday lender All American Check Cashing, alleging it misled customers.
Paxton and 13 other states filed a brief arguing the CFPB doesn't have constitutional authority to levy penalties.
In an announcement this morning, Paxton called the bureau a “rogue agency” that exceeds its constitutional authority.
“The CFPB operates like a branch of government unto itself, insulated from Congressional appropriations and presidential authority,” Paxton said in an email. “Its unlawful structure allows for an unelected and unaccountable director to wield more power than anyone else in the U.S. government, except the president.”
The filing comes as the CFPB grapples with calls, both internally and externally, to dissolve or defang the agency, which was borne of the Dodd-Frank Act of 2010. The CFPB was initially intended to provide independent oversight and regulation of corporations after rampant misleading lending and investment practices led to waves of foreclosures during the financial crisis.
The bureau has been openly targeted under the Trump administration, with the president tweeting in November that it has been a “total disaster.” The resignation of its director last year sparked a congressional battle over executive authority. That fight ended with President Trump’s appointment of Mick Mulvaney to head the agency. During his time in Congress, Mulvaney called for the agency’s dissolution, and he’s since sought to both reel in its authority and put its budget under congressional oversight.
Paxton’s filing with the Fifth Circuit Court of Appeals comes on the heels of a decision in the Southern District of New York that found the bureau's structure unconstitutional. However, a decision by the D.C. Circuit Court of Appeals earlier this year upheld its constitutionality, with Trump’s Supreme Court nominee, Brett Kavanaugh, writing a dissenting opinion.