Supreme Court Decision on Consumer Protection


"The agency may therefore continue to operate, but its director, in light of our decision, must be removable by the president at will", chief justice John Roberts wrote on behalf of the majority.

The court ruled along ideological lines that the structure of the CFPB violates the Constitution.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010, created the CFPB to serve as an independent agency for the goal of enforcing consumer protection laws in the financial services space.

In 2010, then-President Barack Obama appointed the Harvard Law School professor as a special adviser.

But Warren said in a series of tweets in the wake of the Supreme Court's ruling that the "CFPB is here to stay".

Warren defended the CFPB on Twitter noting that even after the supreme court ruling it remained an "independent agency".

Today's decision represents an important victory for the fundamental principle that government officials should be accountable to the American people.

But things changed rapidly when President Donald Trump moved into the White House.

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Richard Hunt, president of the Consumer Bankers Association, said the recent ruling could lead to radical shifts in the financial services industry with each administration. However, the Supreme Court also found the removal provision severable from other parts of Dodd-Frank.

Kathy Kraninger, the director of the CFPB, said the ruling "finally brings certainty to the operations of the bureau".

Established after the financial crisis, the role of CFPB president was created to protect the bureau's independence and its statute said the president could remove its director only for cause, defined as "inefficiency, neglect of duty or malfeasance".

In a 5 - 4 ruling on Monday, the Supreme Court said that the CFPB's structure as a federal agency run by a director who can not be fired except in cases of "inefficiency, neglect of duty, or malfeasance", was unconstitutional.

The legal fight focused on whether the agency's director, a presidential appointee who serves a five-year term, has too much power because the president has only limited authority to remove that individual. When the agency a a sent a demand for information, the law firm refused and alleged the bureau was operating unconstitutionally.

But Seila asked the CFPB to put its request for records aside, arguing it was invalid because the watchdog agency's structure was unconstitutional.

Democrats have long defended the 9-year-old agency, brainchild of U.S. Sen. The district court rejected Seila Law's arguments and ordered compliance with the CID, and the Ninth Circuit Court of Appeals affirmed the district court's decision.

Shugerman further argued that the Chief Justice's language could portend the court's decision as to whether President Trump will be able to keep his tax returns secret, highlighting the linguistic similarities used by Roberts with that of U.S. Solicitor General Noel Francisco when arguing that the president can limit investigations into his own conduct.