Separation of Powers Restoration Act of 2025

— 843 — Financial Regulatory Agencies 37. Table 7, “Civil Penalty Fund Significant Activity,” in Consumer Financial Protection Bureau, Financial Report of the Consumer Financial Protection Bureau, Fiscal Year 2022, November 15, 2022, p. 21, https://files. consumerfinance.gov/f/documents/cfpb_financial-report_fy2022.pdf (accessed March 23, 2023). 38. Ibid. 39. Consumer Financial Protection Bureau, Financial Report of the Consumer Financial Protection Bureau, Fiscal Year 2022, p. 20. 40. 12 U.S. Code § 5491, https://www.law.cornell.edu/uscode/text/12/5491 (accessed March 23, 2023). 41. Consumer Financial Protection Bureau, “Bureau Structure,” last updated March 15, 2023, https://www. consumerfinance.gov/about-us/the-bureau/bureau-structure/ (accessed March 23, 2023). 42. See Consumer Financial Protection Bureau, “Consumer Financial Civil Penalty Fund Rule,” https://www. consumerfinance.gov/rules-policy/final-rules/consumer-financial-civil-penalty-fund-rule/ (accessed March 23, 2023). 43. Consumer Financial Protection Bureau, “Civil Penalty Fund: Consumer Education and Financial Literacy,” https://www.consumerfinance.gov/enforcement/payments-harmed-consumers/civil-penalty-fund/consumer- education-financial-literacy/ (accessed March 23, 2023). 44. U.S. Government Accountability Office, Consumer Financial Protection Bureau: Opportunity Exists to Improve Transparency of Civil Penalty Fund Activities, GAO-14-551, June 2014, https://www.gao.gov/assets/gao-14-551. pdf (accessed March 23, 2023). 45. Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. ___ (2020), https://www.supremecourt.gov/ opinions/19pdf/19-7_n6io.pdf (accessed March 23, 2023). 46. Ibid., p. 37. 47. See 12 U.S. Code § 5497(a)(1), https://www.law.cornell.edu/uscode/text/12/5497 (accessed March 23, 2023). Congress specified that the amount transferred to the CFPB “shall not exceed” 12 percent “of the total operating expenses of the Federal Reserve System…in fiscal year 2013, and in each year thereafter.” Ibid., § 5497(2)(A)(iii). 48. Community Financial Services Association of America v. Consumer Financial Protection Bureau (5th Cir. 2022), pp. 31–32, https://www.ca5.uscourts.gov/opinions/pub/21/21-50826-CV0.pdf (accessed March 23, 2023). 49. Ibid., p. 32. 50. Ibid. (quoting Seila Law LLC v. CFPB, 140 S. Ct. 2183, 2202 n. 8 (2020)). 51. U.S. Supreme Court, “Order List: 598 U.S.,” February 27, 2023, Docket No. 22–448, CFPB et al. v. Com. Fin. Services Assn., et al., https://www.supremecourt.gov/orders/courtorders/022723zor_6537.pdf (accessed March 23, 2023). 52. Devin Watkins, Competitive Enterprise Institute, “Consumer Financial Protection Bureau: Ripe for Reform,” testimony before the Subcommittee on Financial Institutions and Monetary Policy, Committee on Financial Services, U.S. House of Representatives, March 9, 2023, https://docs.house.gov/meetings/BA/ BA20/20230309/115384/HHRG-118-BA20-Wstate-WatkinsD-20230309.pdf (accessed March 23, 2023); Norbert J. Michel, “7 Steps Next Director Can Take to Make the Consumer Financial Protection Bureau Less Awful,” Heritage Foundation Commentary, July 28, 2018, https://www.heritage.org/markets-and-finance/ commentary/7-steps-next-director-can-take-make-the-consumer-financial. 53. The Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation, Federal Reserve, and National Credit Union Administration. Those functions performed by the Office of Thrift Supervision (OTS) prior to Dodd–Frank should be transferred to the OCC since OTS has merged with OCC. 54. See “Section 1071 of the Dodd–Frank Act” in David R. Burton, “Improving Small Business Access to Capital,” Consumer Financial Protection Bureau Symposium on Section 1071 of the Dodd–Frank Act, Small Business Lending Panel, November 6, 2019, https://files.consumerfinance.gov/f/documents/cfpb_burton-written- statement_symposium-section-1071.pdf (accessed March 23, 2023). 55. 5 U.S. Code Chapter 5, https://www.law.cornell.edu/uscode/text/5/part-I/chapter-5 (accessed March 23, 2023). 56. Consumer Financial Protection Bureau, “Administrative Adjudication Proceedings,” https://www. consumerfinance.gov/administrative-adjudication-proceedings/ (accessed March 23, 2023), and 12 Code of Federal Regulations Part 1081—Rules of Practice for Adjudication Proceedings, https://www.law.cornell.edu/ cfr/text/12/part-1081 (accessed March 23, 2023). — 845 — 28 FEDERAL COMMUNICATIONS COMMISSION Brendan Carr MISSION STATEMENT The FCC should promote freedom of speech, unleash economic opportunity, ensure that every American has a fair shot at next-generation connectivity, and enable the private sector to create good-paying jobs through pro-growth reforms that support a diversity of viewpoints, ensure secure and competitive communi- cations networks, modernize outdated infrastructure rules, and represent good stewardship of taxpayer dollars. OVERVIEW AND BACKGROUND The FCC is an independent regulatory agency that has jurisdiction over inter- state and international communications by radio, television, wire, satellite, and cable.1 Five Commissioners are appointed by the President and confirmed by the Senate for fixed five-year terms.2 The FCC does not have any other presidentially appointed, Senate-confirmed officials. Ordinarily, the five-member FCC is divided politically three to two with a majority of Commissioners from the same political party as the President. The Commissioners’ terms are staggered so that every year at the end of June, one Commissioner’s term expires.3 However, a Commissioner can continue to serve until the end of the next session of Congress (or up to 1.5 years beyond the expiration of the term) if no replacement is confirmed after his or her term ends.4 By law, only a bare majority of Commissioners can be from the same politi- cal party (no more than three when there are five members).5 By tradition, the Chairperson resigns when a new President of a different political party is sworn

— 839 — Financial Regulatory Agencies On February 27, 2023, the Supreme Court granted the petition for a writ of certiorari.51 The Court should issue its final decision by 2024. The CFPB is a highly politicized, damaging, and utterly unaccountable federal agency.52 It is unconstitutional. Congress should abolish the CFPB and reverse Dodd–Frank Section 1061, thus returning the consumer protection function of the CFPB to banking regulators53 and the Federal Trade Commission. Provided the Supreme Court affirms the Fifth Circuit holding in Community Financial Ser- vices Association of America, the next conservative President should order the immediate dissolution of the agency—pull down its prior rules, regulations and guidance, return its staff to their prior agencies and its building to the General Services Administration. Until this can be accomplished, however, Congress should: l Ensure that any civil penalty funds not used to recompense wronged consumers go to the Department of the Treasury. The funds should not be retained by the Bureau to be dispensed at the pleasure of the Director— potentially to political actors. Moreover, the CFPB should not have a financial incentive to impose penalties. l Repeal Dodd–Frank Section 1071. This section, which relates to small- business data collection, imposes requirements on financial institutions’ lending to small firms, raises costs, and limits small businesses’ access to capital.54 l Require that no CFPB funds are spent on enforcement actions that are not based on a rulemaking that complies with the Administrative Procedure Act.55 l Require that respondents in administrative actions be allowed to elect whether an adjudication occurs in an administrative law court or an ordinary Article III federal court.56 l Specify the nature of “deceptive, unfair, and abusive” practices to define the scope of the CFPB mission more precisely. — 840 — Mandate for Leadership: The Conservative Promise ENDNOTES 1. H.R. 5480, Securities Act of 1933, Public Law No. 73-22, 73rd Congress, May 27, 1933, https://govtrackus. s3.amazonaws.com/legislink/pdf/stat/48/STATUTE-48-Pg74.pdf (accessed February 20, 2023). 2. H.R. 9323, Securities Exchange Act of 1934, Public Law No. 73-291, 73rd Congress, June 6, 1934, https:// govtrackus.s3.amazonaws.com/legislink/pdf/stat/48/STATUTE-48-Pg881a.pdf (accessed February 20, 2023). 3. Mark T. Uyeda, Commissioner, U.S. Securities and Exchange Commission, “Remarks at the 2022 Cato Summit on Financial Regulation,” November 17, 2022, https://www.sec.gov/news/speech/uyeda-remarks- cato-summit-financial-regulation-111722 (accessed February 20, 2023); Hester M. Peirce, Commissioner, U.S. Securities and Exchange Commission, “It’s Not Just Scope 3: Remarks at the American Enterprise Institute,” December 7, 2022, https://www.sec.gov/news/speech/peirce-remarks-american-enterprise-institute-120722 (accessed February 20, 2023); comment letter from David R. Burton to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, “Re: The Enhancement and Standardization of Climate-Related Disclosures for Investors [File No. S7-10-2; Release No. 33-11042; RIN 3235-AM87],” June 17, 2022, https://www. sec.gov/comments/s7-10-22/s71022-20131980-302443.pdf (accessed February 20, 2023). 4. Size would probably be measured best by public float or the number of beneficial owners. 5. See David R. Burton, “Securities Disclosure Reform,” Heritage Foundation Backgrounder No. 3178, February 13, 2017, https://www.heritage.org/sites/default/files/2017-02/BG3178.pdf; David R. Burton, “Offering and Disclosure Reform,” Chapter 11 in Reframing Financial Regulation: Enhancing Stability and Protecting Consumers, ed. Hester Peirce and Benjamin Klutsey (Arlington, VA: Mercatus Center at George Mason University, 2016), pp. 277–315, https://www.mercatus.org/research/books/reframing-financial-regulation (accessed February 20, 2023); Andrew N. Vollmer, “Investor-Friendly Securities Reform to Increase Economic Growth,” Securities Regulation & Law Report, Bloomberg BNA, Vol. 49, June 5, 2017. 6. See, for example, David R. Burton, “Reforming the Securities and Exchange Commission,” Heritage Foundation Backgrounder No. 3378, January 30, 2019, https://www.heritage.org/sites/default/files/2019-01/ BG3378.pdf; Andrew N. Vollmer, “Testimony on Workforce Management Disclosures and Other SEC Issues,” submitted to the Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets, Committee on Financial Services, U.S. House of Representatives, December 6, 2022, https://www.congress.gov/117/ meeting/house/115227/witnesses/HHRG-117-BA16-Wstate-VollmerA-20221208.pdf (accessed February 20, 2023); David R. Burton, “Reforming FINRA,” Heritage Foundation Backgrounder No. 3181, February 1, 2017, https://www.heritage.org/sites/default/files/2017-02/BG3181.pdf; Hester Peirce, “The Financial Industry Regulatory Authority: Not Self-Regulation After All,” Mercatus Center at George Mason University Working Paper, January 2015, https://www.mercatus.org/research/working-papers/financial-industry-regulatory- authority-not-self-regulation-after-all (accessed February 20, 2023); Thaya Brook Knight, “Transparency and Accountability at the SEC and at FINRA,” Chapter 11 in Prosperity Unleashed: Smarter Financial Regulation, ed. Norbert J. Michel, (Washington: The Heritage Foundation, 2017) https://www.heritage.org/sites/default/ files/2017-02/11_ProsperityUnleashed_Chapter11.pdf. 7. Reorganization Plan No. 10 of 1950, U.S. Code Title 5—Appendix, Reorganization Plans, http://uscode.house. gov/view.xhtml?req=granuleid:USC-prelim-title5a-node84-leaf114&num=0&edition=prelim (accessed February 20, 2023). 8. The board or commission should evaluate the regulatory functions of the National Securities Exchanges, Registered Securities Future Product Exchanges, Registered Clearing Agencies (such as the Depository Trust Company (DTC), the National Securities Clearing Corporation (NSCC) and the Options Clearing Corporation (OCC)), the Municipal Securities Rulemaking Board (MSRB) and the National Futures Association (NFA). This board or commission should have a broad composition and permit minority reports. 9. Boyden Gray & Associates, Comments Submitted on Behalf of Alliance for Fair Board Recruitment Concerning the Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change to Adopt Listing Rules Related to Board Diversity, Amendment No. 1, File No. SR-NASDAQ-2020-081, April 6, 2021 https://www.sec.gov/ comments/sr-nasdaq-2020-081/srnasdaq2020081-8639478-230941.pdf (accessed February 20, 2023); David R. Burton, “Nasdaq’s Proposed Board-Diversity Rule Is Immoral and Has No Basis in Economics,” Heritage Foundation Backgrounder No. 3591, March 9, 2021, https://www.heritage.org/sites/default/ files/2021-03/BG3591_0.pdf. The SEC is contemplating at least two rules that can be expected to require differential treatment based on race, sex, ethnicity, and so on. See Executive Office of the President, Office

— 437 — Environmental Protection Agency l Suspend and review the activities of EPA advisory bodies, many of which have not been authorized by Congress or lack independence, balance, and geographic and viewpoint diversity. l Retract delegations for key science and risk-assessment decisions from Assistant Administrators, regional offices, and career officials. l Eliminate the use of Title 42 hiring authority that allows ORD to spend millions in taxpayer dollars for salaries of certain employees above the civil service scale. l Announce plans to streamline and reform EPA’s poorly coordinated and managed laboratory structure. Budget: Back-to-Basics Rejection of Unauthorized or Expired Science Activities A top priority should be the immediate and consistent rejection of all EPA ORD and science activities that have not been authorized by Congress. In FY 2022, according to EPA’s opaque budgeting efforts, science and technology activ- ities totaled nearly $730 million. EPA’s FY 2023 budget request for the Office of Research and Development seeks funds for more than 1,850 employees—a dramatic increase for what is already the largest EPA office with well above 10 percent of the agency’s workforce.44 ORD conducts a wide-ranging series of science and peer review activities, some in support of regulatory programs established by our envi- ronmental laws, but often lacks authority for these specific endeavors. Several ORD offices and programs, many of which constitute unaccountable efforts to use scientific determinations to drive regulatory, enforcement, and legal decisions, should be eliminated. The Integrated Risk Information System, for example, was ostensibly designed by EPA to evaluate hazard and dose-response for certain chemicals. Despite operating since the 1980s, the program has never been authorized by Congress and often sets “safe levels” based on questionable science and below background levels, resulting in billions in economic costs. The program has been criticized by a wide variety of stakeholders: states; Congress; the National Academies of Science, Engineering, and Medicine (NASEM); and the U.S. Govern- ment Accountability Office (GAO), among others. EPA has failed to implement meaningful reforms, and this unaccountable program threatens key regulatory processes as well as the integrity of Clean Air Act and TSCA implementation. Needed EPA Advisory Body Reforms EPA currently operates 21 federal advisory committees.45 These committees often play an outsized role in determining agency scientific and regulatory policy, — 438 — Mandate for Leadership: The Conservative Promise and their membership has too often been handpicked to achieve certain politi- cal positions. In the Biden Administration, key EPA advisory committees were purged of balanced perspectives, geographic diversity, important regulatory and private-sector experience, and state, local, and tribal expertise. Contrary to con- gressional directives and recommendations from the GAO and intergovernmental associations, these moves eviscerated historic levels of participation on key com- mittees by state, local, and tribal members from 2017 to 2020. As a result, a variety of EPA regulations lack relevant scientific perspectives, increasing the risks of economic fallout and a failure of cooperative federalism. EPA also has repeatedly disregarded legal requirements regarding the role of these advisory committees and the scope of scientific advice on key regulations.46 Needed Science Policy Reforms Instead of allowing these efforts to be misused for scaremongering risk com- munications and enforcement activities, EPA should embrace so-called citizen science and deputize the public to subject the agency’s science to greater scrutiny, especially in areas of data analysis, identification of scientific flaws, and research misconduct. In addition, EPA should: l Shift responsibility for evaluating misconduct away from its Office of Scientific Integrity, which has been overseen by environmental activists, and toward an independent body. l Work (including with Congress) to provide incentives similar to those under the False Claims Act47 for the public to identify scientific flaws and research misconduct, thereby saving taxpayers from having to bear the costs involved in expending unnecessary resources. l Avoid proprietary, black box models for key regulations. Nearly all major EPA regulations are based on nontransparent models for which the public lacks access or for which significant costs prevent the public from understanding agency analysis. l Reject precautionary default models and uncertainty factors. In the face of uncertainty around associations between certain pollutants and health or welfare endpoints, EPA’s heavy reliance on default assumptions like its low-dose, linear non-threshold model bake orders of magnitude of risk into key regulatory inputs and drive flawed and opaque decisions. Given the disproportionate economic impacts of top-down solutions, EPA should implement an approach that defaults to less restrictive regulatory outcomes.