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Chapter 4: Government Overreach

need congressional approval, the director would have to
answer directly to the president, and its funding would
originate in the Congress.
The problem with Dodd-Frank is that an unelect-
ed council has the power to rewrite the rules of
insurance over the objections of insurers, insurance
regulators, and
Congress. A certain
amount of flexibility Dodd-Frank does not honor
checks and balances; it
is necessary for a
eliminates them.
law, but before
Dodd-Frank, the
powers that Congress granted to regulators were
limited. There was a consistency in policy because
regulators had to be responsive to Congress. The Dodd-
Frank Law replaces this predictability with uncertainty
and fear and imposes demands on institutions never
contemplated by Congress.

The Constitution empowers the President and
Congress, as well as the courts, to prevent regulators
from issuing arbitrary or discriminatory regulations.
However, Dodd-Frank does not honor checks and
balances; it eliminates them. Instead, Dodd-Frank
prohibits Congress from reviewing its budget. When the
Consumer Financial Protection Bureau deems a
financial institution too big to fail, the Financial
Stability Oversight Council blocks the courts from
ruling whether the regulators correctly interpreted the
law.

The Financial Stability Oversight Council can
declare a nonbank financial firm as a “systematically
important financial institution” which subjects it to

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