Supreme Court Makes It Easier for President to Remove CFPB Head

J. Scott Applewhite  AP

Trump's administration and the current CFPB leadership agreed with the challengers in the case, although administration lawyers stopped short of arguing that the entire agency should be struck down.

Trump has sought to undermine the CFPB.

Senate Banking Committee ranking member Sherrod Brown (D-Ohio) said at the time, "The CFPB under President Trump has used this pandemic as an excuse to weaken protections for consumers - enabling predatory lending, watering down credit reporting protections and fair lending laws, and making it easier for credit card and debit card companies to rip off their consumers".

Roberts wrote: "The CFPB's structure has no foothold in history or tradition". We go on to hold that the CFPB Director's removal protection is severable from the other statutory provisions bearing on the CFPB's authority.

As Justice Elena Kagan wrote in a dissent, "Today's decision wipes out a feature of that agency its creators thought fundamental to its mission - a measure of independence from political pressure". The director of that agency still works for the American people.

In a split 5-4 decision written by Chief Justice John Roberts, the high court found that the agency's structure vests too much power in the hands of one person, and that the president has broad authority to appoint and remove agency heads. Lawmakers wanted the agency to be independent from political interference. Roosevelt didn't have a problem with Humphrey's job performance and only wanted to fire Humphrey because he had been appointed by the previous president, Republican Herbert Hoover, and was a conservative who disagreed with Roosevelt's policy views. "Nothing in the Supreme Court ruling changes that", Warren wrote. She has headed the agency since December 2018. Now, if Joe Biden wins, he can fire her in January 2021 and replace her with an actual consumer advocate.

In a statement on Twitter following Monday's opinion, Sen.

Then-President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, creating the CFPB, and appointed Warren to take the lead role in establishing it. "The CFPB is here to stay".

The justices ruled in favor of California-based law firm Seila Law LLC, which challenged the agency's structure after being investigated by it. A prime example was a crackdown on Wells Fargo. Also in the CFPB's sights: bill collectors, telemarketers, and others accused of misleading consumers.

The CFPB, as part of its investigation, issued a letter to Seila demanding certain documents. When the agency a a sent a demand for information, the law firm refused and alleged the bureau was operating unconstitutionally.

Consumer agency survives SCOTUS challenge...

"Instead of placing the agency under the leadership of a board with multiple members, Congress provided that the CFPB would be led by a single director, who serves for a longer term than the president and can not be removed by the president except for inefficiency, neglect or malfeasance".

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