Seila Law LLC v. Consumer Financial Protection Bureau
Issues
Whether the provision, in the Dodd-Frank Act, restricting the President’s ability to remove the director of the Consumer Financial Protection Bureau violates the Constitution, and if it does, whether the provision can be severed from the remainder of the Dodd-Frank Act.
This case asks whether the President of the United States is unconstitutionally restricted from removing the director of the Consumer Financial Protection Bureau (“CFPB”). Established through part of the Dodd-Frank Act and in response to the financial crisis in 2008, the CFPB regulates the financial markets and enforces consumer protections. The CFPB is headed by a single director who is removable by the President only for “inefficiency, neglect of duty, or malfeasance in office.” Petitioner Seila Law LLC and Respondent CFPB both argue that this removal restriction violates separation of powers because it impermissibly restricts the President’s ability to remove an executive officer. The Court-appointed Amicus Curiae maintains that so long as the President has the exclusive removal power, a modest restriction on that power is constitutional. The outcome of this case has implications on accountability mechanisms used by administrative agencies, state consumer protection regulators, and industries regulated by the CFPB.
Questions as Framed for the Court by the Parties
(1) Whether the vesting of substantial executive authority in the Consumer Financial Protection Bureau, an independent agency led by a single director, violates the separation of powers; and (2) whether, if the Consumer Financial Protection Bureau is found unconstitutional on the basis of the separation of powers, 12 U.S.C. § 5491(c)(3) can be severed from the Dodd-Frank Act.
In response to the financial system’s failures that led to the 2008 financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).
Edited by
Additional Resources
- Jess Bravin, Trump Administration Looks to Supreme Court to Rein In Consumer Finance Agency, The Wall Street Journal (Sept. 17, 2019).
- Sylvan Lane, Consumer Bureau Chief Explains Support for Lawsuit Limiting Her Power, The Hill (Feb. 6, 2020).
- Adam Liptak, Supreme Court to Rule on Trump’s Power to Fire Head of Consumer Bureau, The New York Times (Oct. 18, 2019).