Critic of CFPB Structure Neomi Rao Nominee to Head OIRA

by Jeff Sovern

OIRA is the Office of Information and Regulatory Affairs (formerly headed by Cass Sunstein). It presides over the issuance of regulations by executive agencies, but not independent agencies (at least, not yet) like the CFPB.  President Trump has nominated for its director George Mason Professor Neomi Rao, a former clerk for Justice Thomas and counsel to the Senate Judiciary Committee under Senator Orrin G. Hatch; she also served in the Bush II administration. The Times has more here.   As for her views on the CFPB, Professor Rao has an article, Administrative Collusion: How Delegation Diminishes the Collective Congress, 90 N.Y.U.L. Rev. 1463 (2015), in which she states that "Reporting about the CFPB reflects the common understanding that the CFPB responds primarily to Senator Elizabeth Warren, who developed and helped to establish the Bureau," and "[A]gency officials and congressional staffers understand that Senator Elizabeth Warren and her staff exercise substantial influence and control over the CFPB, the agency she helped design." I've omitted the cites, but you can click on the linked article to find them if you want. Here's the article's abstract:

This Article identifies a previously unexplored problem with the delegation of legislative power by focusing not on the discretion given to executive agencies, but instead on how delegations allow individual congressmen to control administration. Delegations create administrative discretion, discretion that members of Congress can influence through a variety of formal and informal mechanisms. Members have persistent incentives for delegation to agencies, because it is often easier to serve their interests through shaping administration than by passing legislation. To understand the particular problem of delegation, I introduce the concept of the “collective Congress.” Collective decisionmaking is a fundamental characteristic of the legislative power. The collective Congress serves an important separation of powers principle by aligning the ambitions of legislators with the power of Congress as an institution. Although members represent distinct interests, the Constitution allows members of Congress to exercise power only collectively and specifically precludes them from exercising any type of individual or executive power. Delegation, however, provides opportunities for individual legislators to influence administration and poses a serious separation of powers concern by fracturing the collective Congress. This insight undermines the conventional view that delegations will be self-correcting because Congress will jealously guard its lawmaking power from the executive. Instead, members of Congress will often prefer to collude and to share administrative power with the executive. As a result, delegation destroys the Madisonian checks and balances against excessive delegation. This structural failure suggests a need to reconsider judicial enforcement of the nondelegation doctrine and to implement political reforms to realign Congress with its collective power.


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