A legal support services company has filed a lawsuit against the U.S. Consumer Financial Protection Bureau (CFPB), alleging the emerging Federal agency is too unrestricted in its powers and threatens to aggrandize powers that are already properly delegated to established government agencies.
The suit, filed Monday by bankruptcy software company Morgan Drexen, states the CFPB owes no direct accountability to the American people, and represents a giant step toward costly redundancy, heavier regulation and unchecked government bloat.
The CFPB was from an omnibus piece of reactionary legislation – the Dodd-Frank Act – that ostensibly aimed to rein in Wall Street investment banks deemed “too big to fail” following the economic bailout of 2008.
According to a report Monday by The Hill:
Morgan Drexen claims the agency tried to obtain information that should be protected by attorney-client privileges. The information the CFPB wanted included names, addresses and income information about the clients of lawyers who used the company’s services, it said.
“…You provide that kind of sensitive information to your lawyer and now suddenly an agency of the federal government wants to collect it, and it’s little strange, particularly in light of some of the other things that have been going on with data collecting. We’re worried about the overreach a little bit,” said a lawyer attached to the plaintiffs.
The plaintiffs essentially are arguing that the CFPB is threatening to get into the business of extending its regulatory oversight to lawyers representing financial institutions – effectively adding an extra layer of illegal regulations to government scrutiny of law, a profession that, both legally and ethically, enjoys broad protections of practice and procedure.
The suit seeks to have a court declare the present administrative structure of the CFPB unconstitutional, and to strike down language in the Dodd-Frank Act that founded the agency.