The United States Supreme Court will hear a case challenging the constitutionality of the Consumer Financial Protection Bureau (CFPB), after the Trump Administration submitted a brief on the topic to the high court with the endorsement of the Bureau and its director.
The decision now before the Supreme Court has the potential to determine the fate of the CFPB in the future, but may also have serious ramifications for the actions taken by the Bureau since it was first established in 2010.
“The dispute is not merely an academic one: If the justices agree that the restrictions violate the doctrine known as the separation of powers – the idea that the Constitution divides the different functions of government among the executive, judicial and legislative branches – their ruling could potentially unravel all the CFPB’s decisions in the nine years since its creation,” writes Amy Howe for SCOTUSblog.
The case that will be before the court was filed by Seila Law, a law firm that primarily provides legal services which include resolutions to issues of consumer debt. Seila at one point was the target of investigation by the CFPB, which requested company documents and information that Seila objected to. In its objection, the firm argued that the CFPB’s structure was unconstitutional due to its leadership structure.
The single director of the CFPB cannot be removed by the president unless there is very good reason to do so, as described in the Dodd–Frank Wall Street Reform and Consumer Protection Act that brought the CFPB into existence.
Counsel for the Trump Administration submitted a brief in support of the challenge to the Supreme Court, which also detailed that the challenge itself was endorsed by Kathleen Kraninger, the current CFPB director.
“In the court of appeals, the Bureau defended the constitutionality of the statutory removal restriction,” the brief reads. “Since the court of appeals issued its decision, however, the Director has reconsidered that position and now agrees that the removal restriction is unconstitutional.”
The Supreme Court is not expected to hear oral arguments on the case related to the CFPB until sometime in early 2020. However, one of the Associate Justices on the high court has already filed a relevant opinion when serving on a previous court.
“When he was still a judge on the U.S. Court of Appeals for the District of Columbia Circuit, [Brett] Kavanaugh dissented from a decision by the full court of appeals that rejected a similar challenge to the constitutionality of the CFPB’s leadership structure,” writes SCOTUSblog.
