Supreme Court gives president more consumer agency control

Andrew Cummings
June 30, 2020

But for the proponents of the Consumer Financial Protection Bureau, there is a possible upside to the ruling: Kathy Kraninger, the Trump-appointed CFPB director, can now be fired if the incumbent president loses.

The U.S. Supreme Court on Monday handed President Donald Trump more authority over a federal agency charged with protecting consumers in the financial sector, empowering him to fire its director at will and ruling that the structure it was given by Congress violated the U.S. Constitution.

"The agency may therefore continue to operate, but its Director, in light of our decision, must be removable by the President at will".

The court in a 5-4 ruling said Congress overstepped constitutional lines in 2010 when it created the Consumer Financial Protection Bureau and placed it under the control of a single director who was insulated from the White House's political direction.


The big news from the Supreme Court this morning was the decision related to Louisiana's abortion restrictions, but this one deserves some attention, too. That structure could leave a new president with a director chosen by the previous president for some or all of the new president's time in office. "I respectfully dissent", wrote Justice Elena Kagan who was joined by Justices Sonia Sotomayor, Ruth Bader Ginsburg and Stephen Breyer.

In the wake of the ruling Monday, some liberal allies pointed out another, perhaps ironic silver lining of the conservative court's decision, should Democrats win in the November presidential election.

While the narrow holding in the case may not seem particularly significant, legal experts pointed out the language in Roberts' decision, which espoused a very broad view of executive power, could have lasting repercussions for increasing presidential power. Roberts wrote that their structure has also been contested and that they "do not involve regulatory or enforcement authority remotely comparable to that exercised by the CFPB". "The word "all" is added to the first substantive sentence in Roberts's opinion, and it tells you that the unitary executive mythologists are not good textualists", Shugerman wrote, noting that the Framers of Constitution specifically avoided using such terminology in Article II.

The CFPB was the brainchild of MA senator and former Democratic presidential candidate Elizabeth Warren. For the right, which has long opposed the existence of the CFPB, the high court's majority weakened the agency's independence - which is clearly a step in Republicans' preferred direction - but left the bureau otherwise intact.


The court, in a 5-4 decision, stopped short of the much more drastic solution of invalidating the Consumer Financial Protection Bureau (CFPB), an agency that was the brainchild of MA senator Elizabeth Warren and was set up in 2011 under Democratic former president Barack Obama. Not the banking industry.

"The director of that agency still works for the American people".

The case is Seila Law v. Consumer Financial Protection Bureau, No. 19-7, in the Supreme Court of the United States.


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