With the Supreme Court poised to accept a case challenging the constitutionality of the Consumer Financial Protection Bureau, House Speaker Nancy Pelosi and Financial Services Committee Chairwoman Maxine Waters are defending the bureau as an independent agency.
Pelosi and Waters, both California Democrats, filed an amicus brief this week defending the CFPB’s single-director leadership structure and language in the Dodd-Frank Act that states the bureau’s director can only be removed by the president “for cause.”
At issue is whether Congress, in creating the CFPB, infringed on the authority of the president by concentrating so much power in the single head of an agency. Independent agencies have statutes that protect appointees from removal except in cases of “inefficiency, neglect of duty, or malfeasance in office.”
”As the lower courts have recognized in upholding the constitutionality of the for-cause provision," the brief stated, "Congress established the independent CFPB to curb fraud and promote transparency in consumer loans, home mortgages, personal credit cards, and retail banking."
Last month, the Department of Justice and the CFPB’s own director, Kathy Kraninger, filed briefs arguing that the president should have more flexibility to be able to fire a sitting CFPB director.
Republicans have long wanted a case to reach the high court to knock down the single-director leadership framework. A Supreme Court ruling could potentially impact other agencies with similar structures.
The Supreme Court is expected to announce next week whether it plans to take the case this term, said Alan Kaplinsky, a partner and co-practice leader at Ballard Spahr.
