LEGAL


Liberty, Despots and Due Process By Keith Thornburg, Vice President and General Counsel


The intrinsic nature of country is liberty.Tis is evidenced by the Declaration of Independence and the preamble to the U.S. Constitution. Te preamble is presented as “declaratory and restrictive clauses … to prevent misconstruction or abuse of its [government] powers” and to increase “public confidence in the government.” Te doctrine of divided government established by the Constitution sets in place protections against the concentration of absolute power to ensure our freedom from despots.


Te Fiſth Amendment is our defense against tyranny, allowing citizens to demand due process of law in any matter where the government seeks to deny a person of life, liberty or property. Due process is fair treatment. Any action by a federal executive officer who denies or seeks to deny a person of life, liberty or property is only valid if due process is extended by the officer to the person before the action.


Recently, the 5th U.S. Circuit Court of Appeals ruled against the Securities Exchange Commission in Jarkesy v. SEC. In the underlying administrative case, the SEC acted as prosecutor, judge and jury — forcing the defendant to use an internal SEC judicial process and denying him access to the courts. Te court of appeals ruled that using SEC tribunals denied defendants of due process. Te supporting legislation that allowed the SEC to operate in this manner also violated separation of powers, according to the ruling. It allowed the SEC, an agent of the executive branch, to also act as a legislative and judicial body, writing its own laws and creating its own courts.


Tis was a gross abuse of power by the SEC, but no executive agency has more unchecked power than the Consumer Financial Protection Bureau. Te CFPB was intentionally created with no accountability to the president or Congress. Te director can only be removed for cause, and funding comes directly from the Federal Reserve, giving Congress no budgetary oversight. CFPB directors have presided over some of the most extreme federal overreaches in recent history, and Director Rohit Chopra is no exception. He has lately engaged in divisive rhetoric to cast banks unfairly, deceptively and abusively as predatory “junk fee” addicts.


Te agency recently revised its examination manual to effectively write law and regulation via its examination practices. Tese actions bypass “notice and comment” requirements under the Administrative Practices Act and congressional oversight under the Congressional Review Act. Chopra also has conspired to extend his influence over the Federal Deposit Insurance Corporation and the Federal Reserve.


Recently the FDIC, whose balance and independence are compromised with two of five board seats currently vacant, reversed reforms to the Supervisory Appeals Review Committee that was adopted under former Chairman Jelena McWilliams. Te SARC reforms would have established an independent panel to hear bank appeals of material findings by the FDIC, replacing an unfair internal process similar to the unconstitutional SEC tribunals. Instead, the three current directors, including Chopra, not only reversed the positive reforms and re-implemented the tribunals but also authorized appeals to be decided by just three voting FDIC directors. Te CFPB engages in regulation by enforcement and works hand in hand with the trial attorneys bar to deliver one-two punches to banks and other financial services providers. It is moving aggressively to deny consumer choice and limit competition by forcing one-size-fits-all mandates on a diverse set of institutions.


Te Missouri Bankers Association is the principal advocate for Missouri’s banking industry. We amplify your voices by advocating in partnership with our members, sister state associations and the American Bankers Association. We can and will push back against rogue directors, agencies and bureaucracies. Despots who violate the liberty of citizens must be resisted. Tis means litigating in court and demanding persistent oversight by Congress. Every abuse must be exposed to the light. Our regulatory agencies must be reformed; despots must be removed.


Whenever you see an abuse of power, call it to our attention. If you are engaged in a dispute or litigation, let MBA know about it. MBA is here to advocate for you.


THE MISSOURI BANKER 9


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