Since at least the days of the ancient Greeks, humans have known that one way to write a compelling story is by including a bit of hamartia—a tragic flaw.
Sometimes that is a physical shortcoming—Achilles had that famously vulnerable heel—but it is often more interesting if the flaw is a more innate thing tied to a character’s understanding of themselves. Hubris, or excessive pride, is the famous one. After all, it wasn’t really Achilles’ unprotected heel that took him down, but his false belief that his mother had made him invulnerable.
You might say the exact same thing about the Consumer Financial Protection Bureau (CFPB). It could be headed into a sort of coma later this year because of a fatal flaw embedded by its own parents: Sen. Elizabeth Warren (D–Mass.) and former President Barack Obama.
Unlike every other department and agency within the federal government, the CFPB is not funded via congressional appropriations. Instead, its funding flows directly from the Federal Reserve. Each year, the White House submits a budget to the Federal Reserve, and the central bank hands over the necessary amount—$729.4 million last year, in case you were wondering.
For a long time after the CFPB was created in 2010, there were serious questions about the constitutionality of that structure. That finally got resolved last year, when the Supreme Court ruled that Congress was within its powers to hand off the purse strings. So, funding the CFPB via the Federal Reserve is not unconstitutional—it’s just unorthodox and foolish.
Here’s where the hubris enters the story. When Warren and Obama created the CFPB, they designed that unorthodox funding structure specifically to prevent a future Republican-led Congress from trying to defund the bureau. Remember, this was in the age when Republicans were running around the country telling voters they intended to repeal Obamacare too. By isolating the CFPB from Congress’ budgetary powers, Warren was trying to make it invulnerable to attack.
Instead, she simply gave it a fatal flaw.
Hellbound and Down 