Structure of Liz Warren's Consumer Financial Protection Bureau (CFPB) Ruled Unconstitutional - Granite Grok

Structure of Liz Warren’s Consumer Financial Protection Bureau (CFPB) Ruled Unconstitutional

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The Obama Era Liz Warren-Crafted Consumer Financial Protection Bureau just hit a big Supreme Court bump. “We hold that the CFPB’s leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the separation of powers.”

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The head of the CFPB is endowed with executive powers but none of the typical checks and balances. They can interpret and enforce the law but cannot be removed by the Chief Executive (The President) in whom these powers are solely granted by the Constitution.

[T]he Director (of the CFPB) possesses the authority to promulgate binding rules fleshing out 19 federal statutes, including a broad prohibition on unfair and deceptive practices in a major segment of the U. S. economy. And instead of submitting recommended dispositions to an Article III court, the Director may unilaterally issue final decisions awarding legal and equitable relief in administrative adjudications. Finally, the Director’s enforcement authority includes the power to seek daunting monetary penalties against private parties on behalf of the United States in federal court—a quintessentially executive power

As the Court explains (and I’m sharing this chunk because it has bearing on a good deal of nonsense deployed by the left over the use of that power – citations removed.), 

Article II provides that “[t]he executive Power shall be vested in a President,” who must “take Care that the Laws be faithfully executed.” The entire “executive Power” belongs to the President alone. But because it would be “impossib[le]” for “one man” to “perform all the great business of the State,” the Constitution assumes that lesser executive officers will “assist the supreme Magistrate in discharging the duties of his trust.”

These lesser officers must remain accountable to the President, whose authority they wield. As Madison explained, “[I]f any power whatsoever is in its nature Executive, it is the power of appointing, overseeing, and controlling those who execute the laws.”  That power, in turn, generally includes the ability to remove executive officials, for it is “only the authority that can remove” such officials that they “must fear and, in the performance of [their] functions, obey.”

The President’s removal power has long been confirmed by history and precedent. It “was discussed extensively in Congress when the first executive departments were created” in 1789. “The view that ‘prevailed, as most consonant to the text of the Constitution’ and ‘to the requisite responsibility and harmony in the Executive Department,’ was that the executive power included a power to oversee executive officers through removal.” The First Congress’s recognition of the President’s removal power in 1789 “provides contemporaneous and weighty evidence of the Constitution’s meaning,” and has long been the “settled and well understood construction of the Constitution,” .

This ruling has no bearing on the relevance or role of the CFPB but on the power afforded its directors and the inability of the executive to remove or replace that person despite their ability to use powers constitutionally delegated solely to the President of the United States.

The Constitution requires that such officials remain dependent on the President, who in turn is accountable to the people. The judgment of the United States Court of Appeals for the Ninth Circuit is vacated, and the case is remanded for further proceedings consistent with this opinion.

I presume that this problem, created by Congress, will need to be repaired by them, which always invites all manner of unrelated nonsense and opportunities for abuse. But the director of the agency will no longer be able to wield executive authority and remain unaccountable to the president.

Seeing as the Democrat Congress and Democrat president who created the CFPB intended it that way, it remains to be seen how the present congress will proceed if they even can. It may best be left to a future congress, preferably with fewer Democrats in it to create unaccountable abusive agencies answerable to no one.



Seila Law LLC v. Consumer Financial Protection Bureau