Barney Frank accuses Justice Dept. of ‘assault’ on consumer bureau

A sponsor of the law that created a new federal regulator for consumers said Tuesday that the Trump Justice Department and conservatives are showing hypocrisy in their court challenge of the agency’s single-director setup.

Former Rep. Barney Frank, Massachusetts Democrat and a lead sponsor of the 2010 Dodd-Frank law that imposed more regulation on Wall Street, said the Justice Department is waging an “assault” on the Consumer Financial Protection Bureau.

“Not only is the federal government refusing to defend the constitutionality, they’re participating in the assault on it,” Mr. Frank told reporters on a conference call. “This is one more repudiation of a doctrine they used to say they believed in.”

The Justice Department told a federal appeals court last month that President Trump must have the authority to fire the head of the CFPB. In an unusual move, Justice filed a friend-of-the court brief opposing the CFPB in the major court case, asserting that the agency’s organizational structure is unconstitutional.

Mr. Frank said conservatives opposed to the Dodd-Frank law are guilty of a double standard, citing conservative criticism of then-President Barack Obama’s refusal in 2011 to defend the federal Defense of Marriage Act, the 1996 law that barred federal recognition of same-sex marriages.

“Back then, they (conservatives) were insisting that an administration had the absolute obligation to defend as constitutional a law with which it disagreed on constitutional grounds,” Mr. Frank said.

The call with reporters was arranged by the Constitutional Accountability Center, which filed a “friend of the court” brief last week on behalf of 40 current and former lawmakers in the Court of Appeals for the D.C. Circuit in defense of the CFPB.

In the court case, begun during the Obama administration, the CFPB is seeking to preserve its current structure, in which Director Richard Cordray is protected from being fired by the president. The Trump administration told the appeals court that the president should be able to fire the director at will.

A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit has ruled the agency’s structure is unconstitutional. The full court has granted a rehearing scheduled for May 24.

Conservatives have accused the agency of having too much power; many want to either abolish the CFPB or change its structure to a commission.

Mr. Frank said other federal agencies such as the EPA have a single administrator with more power than Mr. Cordray. He also said a partisan breakdown of the Senate’s confirmation process has led to dysfunctional federal commissions.

“I cannot think of a single multimember commission that is functioning well,” Mr. Frank said. “You know what the average five-member commission lacks these days? Five members.”

The Justice Department’s brief stopped short of advocating for the abolishment of the CFPB, but said the agency has too much centralized power.

“Because a single agency head is unchecked by the constraints of group decision-making among members appointed by different presidents, there is a greater risk that an ’independent’ agency headed by a single person will engage in extreme departures from the president’s executive policy,” Justice officials told the court. “Limitations on the president’s authority to remove a single agency head are a recent development to which the executive branch has consistently objected.”