During the Obama administration, the Consumer Financial Protection Bureau (CFPB) was created as an independent watchdog agency with broad powers and a director whose employment, for all intents and purposes, couldn’t be terminated even by the president of the United States.
The U.S. Supreme Court ruled on Monday, however, that the CFPB’s director can indeed be fired by the president at will, as is the case with the head of any other executive branch agency, the Washington Examiner reported.
That said, the court did seemingly affirm the constitutionality of the bureau in general and, aside from limiting the powers of its director, it allowed the CFPB to remain in place.
In a 5-4 majority opinion, Chief Justice John Roberts wrote, “The agency may therefore continue to operate, but its Director, in light of our decision, must be removable by the President at will,” the Examiner noted.
Warren spins result
According to the Examiner, the lawsuit against the CFPB had been brought by a California law firm that was under investigation by the bureau for alleged “unlawful acts or practices in the advertising, marketing, or sale of debt relief services.”
As CNBC reported, the law firm argued that the bureau’s leadership structure violates the constitutional prinicple of separation of powers in that the director could be removed “only for cause,” which is a difficult hurdle to clear, especially given the limited oversight of the bureau granted to Congress or even the administration.
Initially, a federal district court and an appeals court sided with the agency, but those rulings have now been overturned by the Supreme Court.
Following the ruling, Sen. Elizabeth Warren (D-MA) — who was instrumental in the creation of the CFPB — posted a thread of tweets praising the CFPB and its work over the years while attempting to spin the court’s decision as being no big deal in the larger picture.
“Even after today’s ruling, the @CFPB is still an independent agency. The director of that agency still works for the American people. Not Donald Trump. Not Congress. Not the banking industry. Nothing in the Supreme Court ruling changes that,” Warren tweeted.
Embattled director stays on
Warren also took a predictable shot at President Donald Trump’s appointee to head the CFPB, Kathy Kraninger, whom he first named in 2018 to replace then-Acting Director Mick Mulvaney. The senator accused Kraninger of having “gutted” key agency rules and allowed businesses to “cheat” consumers and said she was “working for the crooks” instead of the American people.
For her part, Kraninger expressed support for the clarifying decision by the Supreme Court, even as it made it easier for her to be fired, tweeting, “Today’s Supreme Court decision finally brings certainty to the operations of the Bureau. We will continue with our important mission of protecting consumers with no question that we are fully accountable to the President.”
It is indeed good to see the administration get what these days seems to be an all-too-infrequent win at the high court.
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