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Ruling says agency can continue to operate, but allows president to fire CFPB director without cause
WASHINGTON -- The U.S. Supreme Court ruled on Monday that the separation-of-powers principle embedded in the Constitution prohibits Congress from giving the director of the CFPB protection from being removed for cause. This part of the decision in Seila Law LLC v. Consumer Financial Protection Bureau was 5-4.
U.S. PIRG Education Fund filed an amicus brief in January arguing that long-established principles and Supreme Court precedent supported the constitutionality of the CFPB’s leadership structure, although Kathy Kraninger, who President Donald Trump appointed to head the CFPB in 2018, decided not to defend its structural constitutionality. The amicus brief also highlighted why Congress purposefully created an independent bureau focused on consumer financial protection: to avoid a repeat of the 2008 financial crisis.
In response, U.S. PIRG Education Fund’s Senior Director of Federal Consumer Program Ed Mierzwinski and Litigation Director Mike Landis released the following statements:
“The CFPB was created after the Great Recession to protect Americans from unscrupulous businesses that have too much power to wreak havoc on the public,” said Mierzwinski, who helped create the Bureau. “Now, the Supreme Court has agreed with the CFPB’s director, who actively worked with the Trump administration and a debt collection law firm, of all things, to undermine the Bureau’s independence from politically-connected special interests.”
“The legal question in this case was whether the CFPB’s structure prohibits the president from carrying out his constitutional duties. Today, the Supreme Court ignored decades of precedent telling us that the answer is ‘no,’” said Landis. “Today’s decision gives more power to the president and creates the opportunity for undue political influence to outweigh reasoned decision-making by federal agencies.”
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