The Supreme Court (Properly) Upholds a Bad Law: Consumer Financial Protection Bureau v. Community Financial Services

I’d like to think the Supreme Court’s May 16 “consumer finance” decision will shatter some myths. But I’m not holding my breath.

One such myth is that the court has a 6–3 conservative majority. Another is that we can restore popular control over the runaway federal government merely by electing good candidates, selecting good judges, and litigating good cases.

I’ll return to the myths shortly. First, let’s examine the May 16 decision.

The CFPB Monstrosity

The name of the case was Consumer Financial Protection Bureau v. Community Financial Services. It challenged part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), passed in 2010.

The bill that created Dodd-Frank exemplifies how the federal government works today. It consumed over 840 pages, stringing together many different subjects, so members of Congress could not vote on them separately.

It was advertised as a response to a financial crisis. One of several reasons for the crisis was an abuse of federal power.* But the response of Dodd-Frank was to increase federal power. Much of that increase came at the expense of the sphere the Constitution reserves to the states.

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