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Supreme Court rules CFPB structure unconstitutional

  • Written by Steel Rose

The Supreme Court on Monday said the structure of the Consumer Financial Protection Board violates the Constitution.

Chief Justice John G. Roberts Jr. wrote the majority opinion.

It is headed by a single director who is nominated by the president and confirmed by the Senate for a five-year term. The director can be removed by the president only for “inefficiency, neglect of duty or malfeasance in office,” unlike, say, Cabinet officers who serve at the president’s pleasure.

But the Constitution gives the president the power to remove top executive branch officials for any reason or no reason at all, the challengers said.

Although the removal-for-cause protection applies to other agencies, such as the Securities and Exchange Commission and the Federal Reserve Board, they have multiple-member boards, rather than a single director.

The case before the Supreme Court was brought by a California law firm that objected to the CFPB’s demand for information regarding an investigation of its practices in resolving consumer debt.

The case is Seila Law v. Consumer Financial Protection Bureau.

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