The Consumer Financial Protection Bureau (CFPB) has been one of the most controversial components of the 2010 Dodd-Frank Act.  It has issued contentious rules, tortured data to make other rules, engaged in an extravagant spending spree, and even found itself blasted by the Government Accountability Office (GAO) for employment discrimination.

The CFPB’s funding and structure – a formulaic revenue stream tied to the Federal Reserve, and a sole director rather than a bipartisan commission – were points of conflict before the Bureau was even up and running.  In October 2016, the D.C. Circuit Court of Appeals struck down the Bureau’s sole-director structure as unconstitutional and recognized the president’s power “to remove the director at will, and to supervise and direct the director.”

Now that Republicans have control of the House, the Senate, and the White House, Democrats are very nervous about what might happen to Sen. Elizabeth Warren’s (D-Mass.) brainchild.

Democrats know that President Trump might fire the CFPB’s director, Richard Cordray, and they’re actively pushing against converting the CFPB to a bipartisan commission.

Republicans have long argued that, at the very least, the agency should be structured similar to regulatory agencies such as the Federal Trade Commission, the Securities and Exchange Commission, or the Commodity Futures Trading Commission.  Last year’s major Dodd-Frank reform legislation, the Financial CHOICE Act, included a provision to convert the CFPB to a commission.

Regardless of whether one believes in the mission of the CFPB (and there are plenty reasons to doubt it’s a wise one), the single director model for such an agency was a bad idea.  Under that framework, any newly elected President could install a new CFPB director and undo his predecessor’s policies.

That set up does not bode well for either side.

Regardless, as long as the D.C. Circuit’s ruling stands, CFPB proponents have very little leverage to stop a conversion to the commission structure.  So CFPB reformists should press their advantage to get the best deal possible.

Politics aside, the case for full repeal of the CFPB is actually quite strong.

Nobody has ever made a strong case that the pre-Dodd-Frank framework failed, much less that a new federal agency was necessary to protect consumers.  CFPB advocates act as though there would be no consumer protection in financial markets without this government agency, but that’s demonstrably false.

Dodd-Frank transferred enforcement of 22 specific consumer financial protection statutes from other agencies to the CFPB.

Prior to Dodd-Frank, federal rulemaking and enforcement for consumer financial protection laws were divided among seven agencies: the Federal Reserve Board of Governors; the Federal Deposit Insurance Corporation; the Office of the Comptroller of the Currency; the Office of Thrift Supervision; the National Credit Union Administration; the Federal Trade Commission, and the Department of Housing and Urban Development.

States also had – and still have – their own consumer protection laws. And, the Department of Justice generally enforces anti-discrimination law when financial institutions are alleged to have perpetrated such crimes.

Was this framework insufficient because one of the seven agencies was derelict in its duties? Or, were consumers confused because too many agencies were involved?

Was it a combination of too many statutes and too many agencies?

The full legislative record of Dodd-Frank and the CFPB offers no objective analysis of these issues.  However, pre-Dodd-Frank advocates of stronger consumer protection in financial markets had been clamoring for reforms since the early 2000s.