Supreme Court gives president more consumer agency control

  • Supreme Court gives president more consumer agency control

Supreme Court gives president more consumer agency control

Established after the financial crisis, the role of CFPB president was created to protect the bureau's independence and its statute said the president could remove its director only for cause, defined as "inefficiency, neglect of duty or malfeasance".

"The agency may ... continue to operate, but its Director, in light of our decision, must be removable by the President at will", Chief Justice John Roberts wrote.

But the Supreme Court's conservative justices have insisted in the past that the president's executive power means he may remove top officials for any reason. But they disagreed on what to do as a result.

At oral argument, Justice Ruth Bader Ginsburg said the question before the court had an "academic quality" to it.

The decision doesn't have a big impact on the current head of the agency.

But for the proponents of the Consumer Financial Protection Bureau, there is a possible upside to the ruling: Kathy Kraninger, the Trump-appointed CFPB director, can now be fired if the incumbent president loses. Its congressional sponsors sought to shield the agency from political influence by giving the director a five-year term in office. The law had said the president could only remove a director for "inefficiency, neglect of duty or malfeasance in office". We therefore hold that the structure of the CFPB violates the separation of powers.

Justice Elena Kagan, writing for herself and three liberal colleagues, called the majority opinion simplistic. "I respectfully dissent", Kagan wrote.

The bureau was the brainchild of now-Sen.

Sen. Elizabeth Warren (D-Mass.) speaks during a protest in front of the Consumer Financial Protection Bureau headquarters in Washington on November 28, 2017. But, she said that even after the ruling the CFPB is "still an independent agency". As reflected in our amicus brief and our work, Americans for Financial Reform Education Fund and the broader community focused on consumer financial protection, including consumer advocates, civil rights organizations, and grassroots groups, have been committed to the CFPB's independence from the beginning because we believe that an independent regulator more insulated from political pressures will lead to the best outcomes for consumers. Not the banking industry. One of those was from the Washington Legal Foundation, which urged the court to rule in the manner in which it eventually did.

The decision caps a 10-year legal battle over the CFPB, which was created to protect consumers from abusive financial-industry practices on products like mortgages, student loans and credit cards.