Trump Administration Seeking Presidential Authority to Remove CFPB Director, asking Supreme Court to Decide

Trump Administration Seeking Presidential Authority to Remove CFPB Director, asking Supreme Court to Decide

September 19, 2019

As the CFPB is currently structured, the head of the CFPB may only be ousted by the President for good cause. However, the Trump Administration is asking the Supreme Court to take up a case[1] on certiorari to decide the issue of the CFPB’s constitutionality, ultimately seeking to allow the President the power to fire the head of the CFPB at will.

The CFPB has been under attack throughout the Trump Administration regarding its leadership structure, some arguing that it is unconstitutional to have a single head (versus a panel of commissioners like the SEC) running an independent agency. From his ruling in the original panel opinion in PHH v. CFPB[2] while he was sitting on the D.C. Circuit, it is known that Justice Kavanaugh believes that the CFPB’s structure at present is unconstitutional.

On September 17, 2019, through a brief filed by U.S. Solicitor General Noel Francisco, the Trump Administration urged the Supreme Court to not dismantle the CFPB in light of its unconstitutional structure, but to resolve the structural defect by allowing the President to remove the director at will.[3] The President has the ability to fire at will the directors of other (non-independent) agencies, such as the Comptroller of the Currency or the FBI. The Trump Administration is seeking the same power over the CFPB. 

In an unprecedented move for the leader of an independent agency, Trump-appointed CFPB Director Kathy Kraninger has made her position public, per the brief filed with the U.S. Supreme Court, that she agrees with the Trump Administration that the agency she oversees is unconstitutionally structured, and she is pushing for presidential control over her position.[4] Director Kraninger also informed high-ranking members of Congress of her new opinion, via letters to Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell.[5]

It remains to be seen whether the Supreme Court will choose to take on this case in its upcoming term.

 


[1] Seila Law LLC v. Consumer Fin. Prot. Bureau, No. 19-7, On Petition for a Writ of Certiorari to the United States.

[2] 839 F.3d 1 (D.C. Cir. 2016).

[3] Seila Law LLC v. Consumer Fin. Prot. Bureau, No. 19-7, On Petition for a Writ of Certiorari to the United States, Brief for the Respondent at 16, filed Sept. 17, 2019.

[4] Id. at 7, 20.

[5] Tucker Higgins, The head of the CFPB now believes that the financial regulator is unconstitutionally structured, CNBC (Sept. 17, 2019), https://www.cnbc.com/2019/09/17/cfpb-head-tells-supreme-court-agency-is-....