The Consumer Financial Protection Bureau: A Novel Agency Design With Familiar Issues

Abstract

This Note examines the structure of the Consumer Financial Protection Bureau, with a specific focus on its single-director structure. The balance of authority between agencies and the three branches of government has been a point of contention for generations, especially since the early twentieth century. This area of the law became even more contested following the financial crisis in 2008. As part of the response to the perceived abuses that led to the global recession, Congress created the Consumer Financial Protection Bureau, ultimately opting to give it a single director as opposed to a board structure. Proponents of this regime cite a need for a robust and unfettered regulatory entity. Opponents argue that the single director structure grants too much authority to one individual within the administrative state. This Note analyzes both sides of the debate regarding the single-director structure of the Consumer Financial Protection Bureau. First, this Note begins with a discussion of the jurisprudence on the area of agency authority, specifically as it relates to single-director agencies. Next, it summarizes two major ideological camps that diverge in determining the most effective structure of these agencies. The first group, which this Note terms “legalists,” argues for an analytical framework derived only from the relevant precedent and the respective statutory mandates. The second group, which this Note terms “protectionists,” argues that agencies must be protected from capture, placing an imperative on the measures most likely to avoid this. Finally, this Note takes a third approach, arguing that the size of the potential regulatory impacts must be taken into account when deciding on the structure of a financial regulatory authority. Ultimately, this Note applies the third approach to the Consumer Financial Protection Bureau, suggesting that its single-director structure is unconstitutional. This is primarily due to the director’s vast amount of unilateral authority, combined with the organization’s lack of political accountability.