AFR and 30 civil rights, labor, community, consumer protection, and economic justice organizations sent a letter calling on the Senate to swiftly act to defend the statutorily mandated independence of financial regulators in the face of unprecedented attacks and firings of commissioners and board members:
Dear Majority Leader Thune and Minority Leader Schumer:
The undersigned 31 civil rights, labor, community, consumer protection, and economic justice advocates write to express our deep and growing alarm over the continuing attacks on independent financial regulatory agencies. These unprecedented assaults on the integrity of these independent regulators threaten to undermine financial stability and the economic security of families across the country. Congress created independent regulatory agencies to insulate them from political and economic pressures so that these agencies could execute their statutory mission to protect the public and the economy. The negative implications of undermining these independent agencies will resonate across states and communities within the United States and beyond.
Congress established independent agencies, like the Federal Reserve (Fed), the Securities and Exchange Commission (SEC), the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), the Commodity Futures Trading Commission (CFTC), the National Credit Union Administration (NCUA), and the National Labor Relations Board (NLRB) to have discrete regulatory oversight without direct influence or control from the President. In Humphrey’s Executor v. United States, the Supreme Court unanimously found that Congress intended these independent agencies to establish “a body which shall be independent of executive authority except in its selection, and free to exercise its judgment without the leave or hindrance of any other official or any department of the government” (emphasis in original). This separation serves a vital purpose of protecting the impartiality of the independent agencies’ actions, which should be focused on fulfilling their missions, and engaging in reasoned fact finding and analysis in order to do so, rather than be subjected to political direction and demand.
The administration has repeatedly undermined the independence of financial regulators by unlawfully removing commissioners and board members. In January, board members of the NLRB were fired. In March, commissioners were purged from their seats at the FTC. In April, board members were removed from their roles at the NCUA. The repeated threats to remove the chair of the Federal Reserve Board have roiled financial markets and undermined confidence in the stewardship of the economy. These disruptive removals leave significant gaps in leadership at the agencies and have targeted leaders committed to advancing the public interest and taking on powerful corporate interests when it is necessary to do so. All of these expulsions are extraordinary direct blows to the independence of these agencies that threaten to undermine key democratic pillars of U.S. society, fair and effective financial oversight, and economic stability.
Similarly, several independent agencies have been gutted from the inside-out. Thousands of dedicated civil servants with specific expertise have been pushed out, fired, or threatened with mass firings at agencies including the SEC, the FDIC, and the CFPB. Many agencies have been ordered to halt regular work, including enforcement and supervision activities that safeguard financial stability and that protect the public across the country from scams, deceptive practices, and wrongdoing at the hands of Wall Street, financial firms, and other large corporations.
The Administration has also issued executive orders to fundamentally distort the regulatory process that would end the long-standing autonomy of independent agencies in proposing and finalizing rules, issuing guidance, and enforcing compliance with law and regulations. These actions too would subject the independent agencies to further political direction and still further increase the lopsided lobbying power of regulated industries. This attacks the independent agencies’ ability to serve as effective regulators in the public interest and increases the power of the President in contradiction to Humphrey’s Executor.
Genuine independence is critical to fulfilling the statutory mandates of these financial regulators to protect people and economic stability. The administration’s actions are dramatically compromising the ability of these agencies to provide the independence necessary to oversee the financial industry without fear or favor. The expanding ramifications of these damaging decisions will be widespread and long-lasting.
We respectfully urge you to act swiftly to reassert the statutorily mandated independence of these financial regulators and oppose the systematic dismantling of the independent agencies by demanding the restoration of commissioners, board members, and staff who were wrongfully dismissed as well as the nomination and confirmation of minority party commissioners, and Board members where there are such vacancies.
Sincerely,
20/20 Vision
Action Center on Race and the Economy
American Association of People with
Disabilities
American Economic Liberties Project
American Federation of Labor and Congress
of Industrial Organizations (AFL-CIO)
Americans for Financial Reform
Center for Economic Integrity
Center for Economic Justice
Center for LGBTQ Economic Advancement
& Research (CLEAR)
Center for Responsible Lending
Consumer Action
Demand Progress
Economic Policy Institute
Green America
HEAL (Health, Environment, Agriculture,
Labor) Food Alliance
Impact Fund
Interfaith Center on Corporate Responsibility
Massachusetts Action for Justice
National Community Reinvestment Coalition
(NCRC)
National Consumer Law Center (on behalf of
its low-income clients)
New Jersey Citizen Action
Oregon Consumer Justice
Oregon Consumer League
Oxfam America
Public Citizen
Public Justice
Rise Economy
South Carolina Appleseed Legal Justice
Center
Transparency Task Force
Virginia Citizens Consumer Council
Woodstock Institute