CFPB Agrees Single-Director Structure is Unconstitutional, Requests U.S. Supreme Court Reviews Case

How much authority does the President of the United States have over the Consumer Financial Protection Bureau (CFPB or Bureau) and its director? This question has seen a steady rise and fall up the judicial ladder, but it appears we may soon get a final answer from the U.S. Supreme Court in Seila Law LLC v. CFPB, Docket No. 19-7. The Supreme Court has not yet granted a writ of certiorari—its permission to hear the case—but it seems this particular case might stand a better chance than prior cases due to its focused, single-question request.

insideARM previously published an article summarizing the Seila petition and all of the different amicus briefs filed supporting the Supreme Court’s review of the case. Most recently, the CFPB filed its brief on the petition for writ of certiorari, which supports the petitioner’s argument that the Bureau’s current structure is problematic.

The opening of the discussion in the CFPB’s brief states that “[t]his case presents a suitable vehicle for the Court’s review of the question.” The brief outlines that the President’s removal power for the Director is currently similar to the removal power the President has over an FTC commissioner, falling into a narrow exception laid out by the Supreme Court in Humphrey’s Executor v. United States, 295 U.S. 602 (1935). However, this exception—according to the brief—applies to multi-member commissions and should not apply to a single-headed agency that “lacks the critical structural attributes that were thought to justify the ‘independent’ status for the multi-member commission.” To summarize, two of the arguments presented were that a single-headed agency better mirrors an executive structure, rather than the judicial structure of a multi-member commission; and there is a higher risk that a single-headed agency could move forward with conduct that is inconsistent with the President’s executive policy, whereas a multi-member commission requires “deliberation and collaboration.”

The Supreme Court’s 2019 term begins on October 7, which means the Court’s answer on whether it will hear the case should be coming soon.