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AFR Statement: Kavanaugh and Anniversary of Wall Street Reform

Submitted by on July 20, 2018 – 11:18 am

FOR IMMEDIATE RELEASE

July 20, 2018

CONTACT:
Carter Dougherty, carter@ourfinancialsecurity.org(202) 251-6700

 

AFR Statement on Kavanaugh and Anniversary of Wall Street Reform Law

 On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law. A year later, the Consumer Financial Protection Bureau officially began its work. Judge Kavanaugh later ruled on a case involving CFPB.

Linda Jun, senior policy counsel at Americans for Financial Reform:

“Eight years ago this week, in response to a devastating financial crisis, President Obama signed the Consumer Financial Protection Bureau into law. Congress equipped the agency with the independence it needs to stand up for  consumers in the marketplace, and the plan worked. With a director committed to that mission the CFPB stopped Wall Street and payday lender ripoffs, and made banking and borrowing safer and fairer. The agency won more than $12 billion in relief for consumers.”

“Brett Kavanaugh’s ruling, later overturned by the full DC circuit, that an independant CFPB is unconstitutional, is but one powerful indicator of the danger he would pose as a Supreme Court justice. Stripping financial regulators like CFPB of their independence means weaker consumer protections. It means more payday loans with triple-digit interest rates, more tricks and traps wired into mortgages, more abusive debt collection, more lending discrimination, and a greater student debt burden. It favors corporate power over the financial well-being of ordinary Americans.”

A few facts about Kavanaugh’s record:

  • After a mortgage lender, PHH, sued the CFPB, Kavanaugh found that the structure of the agency was unconstitutional. When the full DC Circuit later reviewed the decision, it slapped down Kavanaugh’s interpretation as having no basis “in precedent, historical practice, constitutional principle, or the logic of presidential removal power.”
  • His opinions on the CFPB reflect his expansive views on the scope of presidential power. Congress gave the CFPB Director a fixed five year term, and made the director removable only for cause in order to insulate the agency from political pressure, and pressure from the industries it regulates. Kavanaugh believes the President should be able to remove the director at will, erasing its independence.
  • In addition to his decision in the PHH case, Kavanaugh has harshly criticized the “Chevron doctrine,” the legal precedent that requires courts to defer to federal agencies’ expertise on the regulations they issue and oversee. In practice, getting rid of this doctrine would allow individual judges to substitute their own opinions for the knowledge, expertise, and public consultation process of the regulators, and make it easier for Wall Street to overturn rules it opposes.

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