In a 5-4 Supreme Court decision, (Seila Law v. CFPB), it was ruled that restrictions on the President’s authority to an Executive Branch agency are unconstitutional. This paves the way for broad Presidential authority to remove a standing Director of the Consumer Financial Protection Bureau. While granting the White House sole discretion for the termination of it’s director, they rejected arguments for it’s closure.
Monday’s Supreme Court decision handed President Trump greater authority over the Consumer Financial Protection Bureau, ruling that a legal provision restricting the president’s ability to fire the director is unconstitutional. And while the decision diminishes the CFPB’s independence, it preserved the agency by severing a removal clause from the rest of the 2010 law that initially created the bureau.
On the 5-4 decision, Chief Justice John Roberts wrote; “The structure of the CFPB violates the separation of powers,” “The agency may … continue to operate, but its Director, in light of our decision, must be removable by the President at will.”
This decision could create significant implications for the future of the similarly structured, Federal Housing Finance Agency, who oversees Fannie Mae and Freddie Mac. Similar to the Director of the CFPB, the FHFA director is appointed to a five-year term and can only be removed for cause.
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