A Consumer Watchdog Lives for Another Day

http://www.nytimes.com/2016/10/17/opinion/a-consumer-watchdog-lives-for-another-day.html

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The Consumer Financial Protection Bureau, which has had an enormously beneficial effect on consumers since it began operating in 2011, has survived the latest legal challenge to its existence with its powers intact.

But foes of the bureau, including the financial industry and its mostly Republican allies in Congress, would have you believe that the agency has been badly punished for posing an un-American threat to consumers — and to freedom itself.

At issue is a decision last week by a federal appeals court that changed a part of the law that created the agency. Originally, the law said that the president could fire the director of the bureau only “for cause.” Congress included that clause as a way to protect the agency from political interference. But the court agreed with the bureau’s opponents, who argued that limiting the president’s grounds for dismissal gave the director too much power and thus breached the Constitution’s separation of powers doctrine.

The court ruled that the director is now removable at will, as is the case with cabinet secretaries and other agency heads. That is a narrow ruling. It falls far short of the remedy sought by the plaintiffs, who wanted the bureau shut down completely if it was found to be unconstitutionally structured. More important, the ruling will have little to no practical effect on the bureau. The court’s decision to give the president wider latitude in firing the director echoed Republican criticisms of the bureau as above the law and a threat to liberty. But it does not change the bureau’s operations. None of the bureau’s many vital reforms to mortgage lending, student loans, credit cards, auto loans, payday loans, debt collection and other transactions are affected, nor are any of its powers to create and enforce rules to protect consumers.

This is good for all Americans. In the past five years, the bureau has generated nearly $12 billion in financial relief and restitution for more than 27 million consumers who were wronged in the course of routine financial dealings with banks and nonbank lenders. That is $12 billion that otherwise would have enriched executives and shareholders. It is also a measure of the extent to which unfair, deceptive and predatory financial practices still pervade the financial system, giving rise to the need for a strong cop on the consumer beat.

The ruling is not without some adverse consequences. If it survives appeal — a big if — it will allow any president to remove any bureau director before the expiration of a director’s five-year term. That could mean a change in leadership with a change in administrations, which could hurt continuity and inject politics into the process.

For now, however, Americans can rest assured that the consumer bureau is still looking out for their interests.