Supreme Court to determine CFPB constitutionality in March
The Supreme Court announced that it will hear arguments on the constitutionality of the Consumer Financial Protection Bureau’s leadership structure in early March.
In a scheduling order released on November 26, 2019, the Supreme Court announced that oral arguments in Seila Law LLC v. CFPB will happen on March 3.
The case will determine (1) Whether the vesting of substantial executive authority in the Consumer Financial Protection Bureau, an independent agency led by a single director, violates the separation of powers; and (2) whether, if the Consumer Financial Protection Bureau is found unconstitutional on the basis of the separation of powers, 12 U.S.C. §5491(c)(3) can be severed from the Dodd-Frank Act.
Back in October, The Supreme Court announced it will take on the case challenging the constitutionality of the CFPB’s leadership.
As it stands now, President Donald Trump cannot fire the CFPB director unless it’s for cause. The previous decision made the director fireable at will, but that’s not the case anymore as the case continues to be challenged in court.
And now the Supreme Court will have the final say.
But now even CFPB Director Kathy Kraninger is siding against her own bureau, saying, “The bureau should adopt the Department of Justice’s view that the for-cause removal provision is unconstitutional.”
Within the housing industry, various groups are torn on the hearing, with some saying a committee to head the bureau will keep it more accountable and others saying a ruling against the current structure could threaten the CFPB’s independence.