SCOTUS Rules Against CFPB Structure

By Staff Writer June 30, 2020
President Trump President Trump

The U.S. Supreme Court ruled that the head of the Consumer Financial Protection Bureau can be fired by the President and that the structure of the body violates the Constitution’s separation of powers.

“We hold that the CFPB’s leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the separation of powers,’” The Court stated.

The decision allows the President to fire the head of the agency at will but does allow the agency to continue to operate.

The case, Seila Law v. CFPB, involved a challenge to the constitutionality of the CFPB’s structure, an independent agency led by a single director. The CFPB is funded by the Federal Reserve – not Congress. Its director, while serving a five-year term can only be removed for cause, unlike other political appointments.

Since the CFPB’s inception in 2011, following the 2008 financial crisis, it  has been a political lightning rod.

The National Independent Automobile Dealers Association has sparred with the bureau in recent years over two issues: arbitration and open recalls.

President Donald Trump’s Justice Department asked the Supreme Court to take up the issue after the U.S. Court of Appeals for the District of Columbia Circuit Court ruled the CFPB’s structure constitutional.

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Last modified on Tuesday, 30 June 2020 20:41

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