Justices Wrestle With President’s Power to Fire Consumer Advocate

March 3, 2020 by Dan McCue
A model of the Supreme Court chamber. (Photo by Dan McCue)

WASHINGTON – The Supreme Court wrestled Tuesday with the politically charged dispute over whether the Consumer Financial Protection Bureau, created in the wake of the 2008 financial crisis, is constitutional.

The arguments the justices heard Tuesday stemmed from an appeals court decision that upheld the structure of the watchdog agency.

Under the Dodd-Frank Act that created the CFPB, its director is appointed by the president and confirmed by the Senate to a five-year term. The president can only remove a director for “inefficiency, neglect of duty or malfeasance in office.”

That means that an incoming president can’t immediately fire the agency’s head, appointed in the previous administration, without cause.

Defenders of the bureau’s structure say it is good in that it insulates the agency’s head from pressure by the president.

But the Trump administration, among others, contends the bureau is unlawfully autonomous.

Seila Law LLC, the California law firm that is the named petitioner in the case says the structure of the bureau violates the separation of powers.

“The Constitution empowers the president to keep federal officers accountable by removing them from office,” the law firm’s writ of certiorari states. “While in limited circumstances the Court has upheld the constitutionality of certain multi-member ‘independent’ agencies, whose leading officers the president can remove only for cause, the Court has never upheld the constitutionality of an independent agency that exercises significant executive authority and is headed by a single person.”

“In 2010, Congress created just such an agency: the CFPB,” the brief continues. “Headed by a single director removable only for cause, the CFPB possesses substantial executive authority, including the power to implement and enforce 19 federal consumer-protection statutes.”

During arguments Tuesday,Justice Brett Kavanaugh called that restriction “troubling,” but most of his colleagues seemed to disagree.

Justice Ruth Bader Ginsburg, for instance, who described the restrictions as “modest.”

The impact of the justices’ decision in the case could go beyond the CFPB because the heads of other so-called independent agencies have a similar restriction on being fired. Those agencies include the Federal Reserve, Federal Deposit Insurance Corporation, Federal Trade Commission, Federal Communications Commission and Securities and Exchange Commission.

A decision in the case, Seila Law LLC v. Consumer Financial Protection Bureau, 19-7, is expected by the end of June.

In The News

Health

Voting

Supreme Court

Affordable Care Act Survives Its Toughest Challenge Before the High Court
Supreme Court
Affordable Care Act Survives Its Toughest Challenge Before the High Court
June 17, 2021
by Dan McCue

The Supreme Court on Thursday dismissed a challenge to the Affordable Care Act, preserving insurance coverage for millions of Americans. By a 7-2 vote, the justices left the entire law intact and ruled that Texas and other Republican-led states (as well as two individual plaintiffs) have... Read More

Justices Defer Harvard Case on Race in College Admissions
Supreme Court
Justices Defer Harvard Case on Race in College Admissions

WASHINGTON (AP) — With abortion and guns already on the agenda, the conservative-dominated Supreme Court is considering adding a third blockbuster issue — whether to ban consideration of race in college admissions. The justices on Monday put off a decision about whether they will hear an... Read More

Justices Reject Johnson & Johnson Bid to Overturn $2B Talc Verdict
Supreme Court
Justices Reject Johnson & Johnson Bid to Overturn $2B Talc Verdict
June 10, 2021
by TWN Staff

The Supreme Court this week decided to leave in place a $2 billion verdict in favor of women who claim they developed ovarian cancer from using Johnson & Johnson talc products. As is their custom, the justices did not comment Tuesday on why they rejected Johnson & Johnson's... Read More

Supreme Court Limits Prosecutions for Unauthorized Computer Use
Supreme Court
Supreme Court Limits Prosecutions for Unauthorized Computer Use
June 7, 2021
by Tom Ramstack

WASHINGTON -- A U.S. Supreme Court ruling Thursday makes it harder to impose liability on workers who use their employers’ computers for unauthorized purposes. The ruling restricts the Justice Department's authority to prosecute unauthorized computer use under the 1986 Computer Fraud and Abuse Act. It also... Read More

Supreme Court Rejects Review of Male-only Military Draft
Supreme Court
Supreme Court Rejects Review of Male-only Military Draft

WASHINGTON — The Supreme Court on Monday decided not to review a lawsuit asking whether it's sex discrimination for the government to require only men to register for the draft when they turn 18. The challenge, originally brought by a men's rights group, asserted that the... Read More

Gorsuch Holds 9th Circuit Went Too Far in Accepting Immigrant Testimony
Supreme Court
Gorsuch Holds 9th Circuit Went Too Far in Accepting Immigrant Testimony
June 1, 2021
by Dan McCue

WASHINGTON - In a unanimous ruling, the Supreme Court tossed a pair of decisions from the 9th U.S. Circuit, holding the appellate court went too far in assuming that an immigrant's testimony was credible unless an immigrant judge said otherwise. Tuesday’s ruling involved a pair of... Read More

News From The Well
scroll top