“Supreme Court Questions Legitimacy of Controversial Consumer Protection Agency

The Supreme Court of the United States (SCOTUS) has recently heard oral arguments in a case that may have a significant impact on the Consumer Financial Protection Bureau (CFPB), the government’s consumer watchdog agency. The case, Seila Law LLC v. Consumer Financial Protection Bureau, is centered on the constitutionality of a provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act that prevents the President from directly removing the director of the CFPB. At issue in the case is whether or not this provision is constitutional. SCOTUS has heard arguments from the petitioner, Seila Law, which is challenging the constitutionality of the provision. The petitioner, representing Seila Law, argued that the provision violates the separation of powers principle and should be struck down as unconstitutional. However, some of the Justices of the Supreme Court have indicated they are not inclined to go that far. In oral arguments, Justice Breyer suggested that he was likely in favor of preserving the provision but with some modifications. He proposed that the Director of the CFPB should be removed if the President is of the opinion that the director is no longer fit for the position. Meanwhile, other Justices such as Roberts and Kavanaugh seemed to indicate a bit more skepticism of the petition’s arguments. They noted that the Court should be hesitant to unilaterally invalidate a law that Congress has already written and thereby rewrite it for the Court. No matter which way the Supreme Court decides in this case, it could have a major impact on the CFPB, which was created by Congress as part of the Dodd-Frank Act to protect consumers from predatory lending practices. A ruling in favor of the petitioner would potentially weaken the agency’s independent authority as it would be put in the position of needing the approval of the President for every decision it makes. Alternatively, a decision in favor of the CFPB could give it added protections as well as greater stability by allowing it to function without the risk of direct interference from the President. It is now a matter of waiting to see how the Supreme Court decides in this case. With a majority of the Justices appearing to be skeptical of the petitioners arguments, the CFPB may enjoy some extra safety. The Court is expected to make a decision by the end of June 2020. The Supreme Court of the United States (SCOTUS) has recently heard oral arguments in a case that may have a significant impact on the Consumer Financial Protection Bureau (CFPB), the government’s consumer watchdog agency. The case, Seila Law LLC v. Consumer Financial Protection Bureau, is centered on the constitutionality of a provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act that prevents the President from directly removing the director of the CFPB. At issue in the case is whether or not this provision is constitutional. SCOTUS has heard arguments from the petitioner, Seila Law, which is challenging the constitutionality of the provision. The petitioner, representing Seila Law, argued that the provision violates the separation of powers principle and should be struck down as unconstitutional. However, some of the Justices of the Supreme Court have indicated they are not inclined to go that far. In oral arguments, Justice Breyer suggested that he was likely in favor of preserving the provision but with some modifications. He proposed that the Director of the CFPB should be removed if the President is of the opinion that the director is no longer fit for the position. Meanwhile, other Justices such as Roberts and Kavanaugh seemed to indicate a bit more skepticism of the petition’s arguments. They noted that the Court should be hesitant to unilaterally invalidate a law that Congress has already written and thereby rewrite it for the Court. No matter which way the Supreme Court decides in this case, it could have a major impact on the CFPB, which was created by Congress as part of the Dodd-Frank Act to protect consumers from predatory lending practices. A ruling in favor of the petitioner would potentially weaken the agency’s independent authority as it would be put in the position of needing the approval of the President for every decision it makes. Alternatively, a decision in favor of the CFPB could give it added protections as well as greater stability by allowing it to function without the risk of direct interference from the President. It is now a matter of waiting to see how the Supreme Court decides in this case. With a majority of the Justices appearing to be skeptical of the petitioners arguments, the CFPB may enjoy some extra safety. The Court is expected to make a decision by the end of June 2020.