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Is the Consumer Financial Protection Bureau truly independent?

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Jarrett Dieterle
Legal Intern, Manhattan Institute's Center for Legal Policy

The Consumer Financial Protection Bureau (CFPB) was instituted by the Dodd-Frank Act in 2010 and has engendered concerns about whether it will be able to maintain its independence as a regulatory agency. As Manhattan Institute's director of the Center for Legal Policy Jim Copland has described previously, the CFPB - unlike most federal agencies - lacks Congressional oversight and is only accountable to the President. The CFPB faced further scrutiny after President Obama's controversial recess appointment of Richard Cordray to be its head.

Concerns about the CFPB's independence have increased in recent days after Patrick McHenry, a North Carolina Republican member of the House of Representatives, sent a letter to Cordray inquiring about the relationship between CFPB officials and the White House:

In a letter sent to consumer chief Richard Cordray Monday, Rep. McHenry asked for details on how the agency's top staffers interact with the White House, and why. "Although employees of other independent agencies meet with White House staff members and such meetings are not per se inappropriate, the frequency of the CFPB's visits and the CFPB's coordinated public events with the White House could suggest that the Bureau's regulatory actions are indirectly shaped by these interactions," the Congressman wrote.

A few examples, though circumstantial, raise eyebrows. In June Mr. Cordray briefed reporters in the White House--alongside presidential spokesman Jay Carney and Secretary of Education Arne Duncan--on student loans and rising tuition. President Obama has made his attempts to ease student debt burdens a centerpiece of his campaign. Public records show Mr. Cordray has also held calls with White House Deputy Chief of Staff for Policy, Nancy-Ann DeParle, and attended a "White House Cabinet Affairs Chief of Staff Lunch," though it's unclear why.

McHenry's letter itself may not lead to any disclosure regarding the CFPB's independence, but the relationship between the administration and the CFPB will be likely to face continued scrutiny.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


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The Manhattan Insitute's Center for Legal Policy.