This is John Bachelor.

Conversation with Richard Epstein, Professor Richard Epstein,

a senior fellow at the Hoover Institution,

teaches law at NYU and the University of Chicago,

about the recent US Supreme Court decision, 7 to 2, to maintain the status quo any with regard

to how the Consumer Financial Protection Bureau pays for itself.

It draws money from the Federal Reserve. It does not require, and in fact it does not invite

oversight or in participation by the U.S. Congress. That is unusual unusual as Richard now explains. The Supreme Court

decision is it stays the way it is. The Federal Reserves pays what Richard characterizes as a favorite client.

More on this later.

Yeah, I was actually somewhat stunned by the operation.

I regard this is one of the sort of small and senseless tragedies in terms of judicial

administration.

If one goes back to the origin of the CFPB and the way in which it operates, the effort on the part of Elizabeth

Warren and Richard Cordray would to insulate it from political pressures.

And what they did is in effect, they said it could take its appropriation in whatever

amount they needed from the general budget of the Federal Reserve System.

Well you then look at what the Constitution says,

no money shall be drawn from the Treasury,

but in consequence of appropriations made by law.

And I think, you know, Clarence Thomas gave an incredibly literal meaning of that and he said so long as Congress makes an original interpretation and it wasn't to the CFPB but to the Federal, and then it has complete power to decide what further appropriations

they make.

...