Separation of Powers at Stake in Constitutional Challenge to Consumer Bureau’s Structure

The Daily Signal | 10/22/2019 | Staff
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GianCarlo Canaparo is a legal fellow in the Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation.

The Supreme Court agreed Oct. 18 to hear a case challenging the constitutionality of the Consumer Financial Protection Bureau.

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The court will decide whether, by sharply curtailing the president’s ability to remove the head of this executive branch agency, Congress violated the Constitution’s separation of powers.

Congress created the Consumer Financial Protection Bureau in 2010 to regulate banks, securities firms, payday lenders, and other financial companies providing services to consumers.

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It is unique among executive agencies in that it has a single director whom the president cannot remove except “for cause”—that is, “inefficiency, neglect of duty, or malfeasance in office.”

Seila Law, a California-based law firm that helps people get rid of consumer debt, sued, arguing that that structure violates the separation of powers because Congress gave the director a great deal of executive power without making him accountable to the president.

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The appeal comes out of the U.S. Court of Appeals for the 9th Circuit, which upheld the consumer bureau’s structure, although it said Seila Law’s argument was “not without force.” The court nevertheless rejected Seila Law’s argument because “the for-cause removal restriction protecting the CFPB’s Director does not impede the President’s ability to perform his constitutional duty to ensure that the laws are faithfully executed.”

The U.S. Court of Appeals for the District of Columbia Circuit upheld the structure of the bureau last year, when now-Supreme Court Justice Brett Kavanaugh was still a judge on that court.

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In a forceful dissent, Kavanaugh wrote that “other than the President, the Director of the CFPB is the single most powerful official in the entire U.S. government, at least when measured in terms of unilateral power.” Kavanaugh explained that unlike other agency heads, the Consumer Financial Protection Bureau’s...
(Excerpt) Read more at: The Daily Signal
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