"The CFPB's single-director structure contravenes this carefully calibrated system by vesting significant governmental power in the hands of a single individual accountable to no one", the chief justice wrote. Ultimately, the Chief Justice Roberts wrote that the FTC directorate, which consists of several members serving staggered terms and is bipartisan, was fundamentally different from the single-director CFPB. United States, which considered and affirmed the constitutionality of the FTC, counseled that the CFPB's structure should be upheld.
The court, in a 5-4 decision, stopped short of the much more drastic solution of invalidating the Consumer Financial Protection Bureau (CFPB), an agency that was the brainchild of MA senator Elizabeth Warren and was set up in 2011 under Democratic former president Barack Obama.
The ruling could have far-reaching implications for dozens of agencies including the FHFA.
"The director of that agency still works for the American people", Warren wrote Monday.
"This fundamental textual and historical error about "all" is the basis of the "exclusivist" unitary executive argument against the congressional and Manhattan DA subpoenas for Trump's tax returns. Nothing in the Supreme Court ruling changes that", she said. The decision means that the president can now fire the CFPB's director "at will" or, in other words, for basically any reason.
Warren touted the bureau during her presidential campaign, saying it returned more than $12 billion to consumers under the Obama administration.
The Justice Department under President Trump and the agency's director argued against the structure of the CFPB, saying it concluded the "statutory restriction on the president's authority to remove the director violates" the Constitution.
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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.
She added, "What does the Constitution say about the separation of powers - and particularly about the president's removal authority?"
Specifically, in 2017, the CFPB issued a civil investigative demand (CID) to Seila Law to determine whether it had engaged in unlawful debt collection practices.
The justices ruled in favor of California-based law firm Seila Law LLC, which challenged the agency's structure after being investigated by it.
The agency proved an effective watchdog under Obama.
Yet consumer complaints filed to the agency have surged in recent years, with complaints setting new records in March and April, in large part due to the coronavirus pandemic, according to research by the nonprofit U.S. PIRG.
The 5-4 ruling could open the Consumer Financial Protection Bureau (CFPB) to politicization. But under the Trump administration, the CFPB has scaled back its enforcement efforts.