Supreme Court Will Look into Whether Watchdog Warren Helped Create Is Actually Constitutional

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Author: Jack Davis

The Supreme Court has agreed to consider whether the brainchild of Democratic presidential candidate Sen. Elizabeth Warren of Massachusetts is actually constitutional.

The Consumer Financial Protection Bureau is an independent federal agency that oversees consumer-related actions in the financial sector. It was created by Congress in 2010.

The issue before the court is that the director serves a five-year term and can only be removed for “inefficiency, neglect of duty, or malfeasance in office,” Fox News reported.

“This case presents the question of whether the vesting of substantial executive authority in the CFPB, an independent agency headed by a single director, violates the separation of powers. That question is of extraordinary constitutional and practical importance, and the United States has already recommended that this Court grant review to resolve the question in an appropriate case (and identified this case as a candidate),” the Justice Department wrote in a Supreme Court brief.

Opponents of the bureau argue that the length of the director’s term, and a president’s inability to fire whoever holds the post, means that a director could be appointed by one president, then serve the entire term of a succeeding president without ever being responsible to the chief executive elected by the voters, according to The Daily Caller.

“An agency over which the president lacks control of both back-end removal and front-end appointment represents a further departure from the constitutional design,” the Justice Department brief states.

Warren characterized the suit in political terms.

“Big banks and their Republican allies have been trying to kill the CFPB for years, and the Trump administration is hoping the right-wing, pro-corporate Supreme Court will help. I’ve got news for them: Like it or not, the CFPB is constitutional,” Warren tweeted.

Further, House Democrats are opposing any change in how the agency is structured.

However, Kathleen Kraninger, the agency’s current director, believes the separation of powers clause of the Constitution has been violated by the terms of the agency’s creation.

The case was brought by Seila Law, a California-based law firm. The federal government is siding with Seila Law in arguing to change the CFPB’s structure.

The Community Bankers Association has said that whatever the justices rule, Congress should create a governing commission that has multiple members, the Washington Times reported.

“A sole-director calling all the shots will never provide the long-term stability consumers deserve and the well-regulated financial sector needs,” said CBA President Richard Hunt, according to the newspaper.

Now-Supreme Court Justice Brett Kavanaugh was in a dissenting position when the Washington D.C. Court of Appeals upheld the constitutionality of the CFPB’s structure in 2018.

“The independent agencies collectively constitute, in effect, a headless fourth branch of the U.S. government,” then-Circuit Judge Kavanaugh wrote, according to USA Today. “They hold enormous power over the economic and social life of the United States. Because of their massive power and the absence of presidential supervision and direction, independent agencies pose a significant threat to individual liberty and to the constitutional system of separation of powers and checks and balances.”

And as news reports noted, Kavanaugh took particular aim at the CFPB director’s post.

“No independent agency exercising substantial executive authority has ever been headed by a single person. Until now,” Kavanaugh wrote, according to The Times.

“Indeed, other than the President, the Director of the CFPB is the single most powerful official in the entire U.S. Government, at least when measured in terms of unilateral power,” Kavanaugh wrote, according to CNBC. “That is not an overstatement.”

 

Source: Supreme Court Will Look into Whether Watchdog Warren Helped Create Is Actually Constitutional