Court urged to expand president’s consumer-bureau control
President Donald Trump’s administration has urged the U.S. Supreme Court to give the president more control over the Consumer Financial Protection Bureau, the agency that regulates mortgages and credit cards.
Asking the court to take up a pending appeal, administration lawyers said the Constitution requires that the president be allowed to fire the agency’s director for any reason. The 2010 law that set up the bureau says the director can be removed only for “inefficiency, neglect of duty, or malfeasance in office.”
The administration’s position increases the chances the court will take up the issue in the nine-month term that starts in October. If the court takes the case, then a ruling will come by June.
The filing was a response to an appeal by Seila Law, a California law firm being investigated by the bureau over its sales pitches to indebted consumers. The firm is arguing that the bureau was set up in violation of the constitutional separation of powers.
In a brief filed Tuesday, U.S. Solicitor General Noel Francisco agreed with the law firm that the bureau’s structure is unconstitutional. But Francisco said the court should leave the bureau intact, and his brief left open the possibility that the bureau could continue to press the investigation.
Francisco said the constitutional issue “has broad implications for the president’s ability to supervise the executive branch.”
The Consumer Financial Protection Bureau, set up in the wake of the 2008 financial crisis, regulates credit cards, auto loans and other consumer finance products. Supporters say its independence helps insulate it from political pressures.
During most of Trump’s first year as president, the bureau had a holdover director, Richard Cordray, who pressed an aggressive regulatory agenda. Cordray, a Democrat, stepped down in November 2017 to begin an unsuccessful campaign for governor of Ohio.
The current director, Kathy Kraninger, is a Trump appointee who was confirmed by the Senate in December 2018 without any Democratic support.