Defenders of the Consumer Financial Protection Bureau argue that Congress has broad authority to structure independent agencies and that the CFPB “fits comfortably” within the constitutional tradition of limits to the president’s authority.
House Speaker Nancy Pelosi, D-Calif., and House Financial Services Chairwoman Maxine Waters, D-Calif., joined Democratic senators, 24 state attorneys general and consumer advocates in filing briefs with the Supreme Court this week in the landmark case challenging the CFPB’s structure.
At issue is a provision in the Dodd-Frank Act that was meant to protect the bureau's independence by stating a president can only remove a CFPB director "for cause." Plaintiffs and
But those supporting the CFPB's structure say there was nothing unusual about the statutory provision.
“For much of the Nation’s history, Congress has exercised its broad authority to structure the Executive Branch by creating independent agencies headed by officers removable only for cause,” House Democrats wrote. “The Bureau performs the same regulatory functions independent agencies have long performed, and its Director is subject to the same removal protection this Court has long blessed.”
The Supreme Court will hear oral arguments March 3. The case is being closely watched because it could determine whether the president has the discretion to fire the head of an independent agency without cause. Congress said the CFPB director can be removed only for “inefficiency, neglect of duty, or malfeasance in office.”
House Democrats argue that the removal protection given to the CFPB’s director has no bearing on Seila Law, a California debt collection law firm that sued the agency to stop it from enforcing a civil investigative demand by claiming it was unconstitutional.
The briefs generally cite past cases in which a California district court and the U.S. Court of Appeals for the Ninth Circuit upheld the CFPB’s constitutionality.
“The independence of the Consumer Bureau is essential to curb the fraud and abuse that led up to the Great Recession,” Pelosi said in a press release.
Waters criticized Republicans for repeatedly trying to gut the agency.
“The Trump Administration and Congressional Republicans continue to do all they can to eliminate this critical consumer protection agency, including by making desperate and baseless legal claims about the Consumer Bureau that other judges have rejected,” Waters said in a press release. “The House of Representatives is setting the record straight that, as several appeals courts have found, the Consumer Bureau’s independent structure is clearly constitutional.”
Paul Clement, a former Republican solicitor general, was
New York Attorney General Letitia James led a coalition of 24 attorneys general in a brief that argued the high court should preserve the CFPB, created by the Dodd-Frank Act in 2010.
“Opponents are now asking the Supreme Court to undo years of financial and consumer protections that have saved Americans hundreds of millions of dollars and remedied countless abusive and fraudulent practices,” James said in a press release.
Several legal scholars wrote that Congress has been experimenting with the design of federal agencies for the past 230 years.
“Novelty is not a constitutional enemy of the administrative state, but a constitutional invitation that Congress has accepted for over two centuries,” wrote Peter Conti-Brown, an assistant professor at the University of Pennsylvania’s Wharton School; Adam Levitin, a law professor at Georgetown Law School; and Patricia McCoy, a law professor at Boston College Law School.
