Why Kavanaugh Nomination Is Good For CU’s

July 10, 2018 at 9:20 am Leave a comment

Today is a bad day for anyone who thinks that an independent “bureau” overseen by a single individual who can only be removed for “cause” is constitutional.

My wife accuses me of being a beater of dead horses; she has a point but this really is an issue worth harping on: Both parties have stood by while regulatory agencies have exercised increasingly broad and unchecked legislative powers even though no such authority exists under the constitution. The CFPB represents the high-water mark of this abdication of responsibility and it is my hope that the nomination of Brett Kavanaugh to replace Justice Kennedy will help put an end to this pernicious trend.

Readers of this blog already know a bit about his Judicial philosophy and how it could impact your credit union. It was Judge Kavanaugh who wrote the majority opinion for the DC Court of Appeals holding that the CFPB’s  leadership structure was unconstitutional and mandating that its Director serve at the pleasure of the President. Although the court as a whole ultimately reversed this ruling,  his logic makes it clear that he, like the previous Trump selection Neil Gorsuch, feels that (1)Agencies have too much power and (2) Courts have given too much deference to agency interpretations of Congressional statutes.

In case you think these are just the rantings of your blogger here is what the man himself said in his CFPB decision:

“The independent agencies collectively constitute, in effect,

a headless fourth branch of the U.S. Government. They

exercise enormous power over the economic and social life of

the United States. Because of their massive power and the

absence of Presidential supervision and direction, independent

agencies pose a significant threat to individual liberty and to

the constitutional system of separation of powers and checks

and balances”

Will this shift in approach always benefit credit unions? Of course not. There are times when deference to NCUA regulations-such as the definition of “local communities”- helps the industry.

But if credit unions have learned anything over the last ten years it is that regulations are easier to enact and just as burdensome as a mandate enacted by Congress. We need to put more responsibility back in the hands of the legislators we help elect and take power away from the unelected bureaucrats who are suffocating  so many small and medium-sized credit unions with their rule making machines.



Entry filed under: Legal Watch, Regulatory. Tags: .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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