Consumer watchdog structure is ruled unconstitutional
The U.S. consumer watchdog agency, enmeshed in partisan politics since its creation after the financial crisis, now has had its structure ruled unconstitutional because it gives too much power to a single agency director.
A federal appeals court ruled Tuesday that the way the Consumer Financial Protection Bureau is organized violates the Constitution’s separation of powers by limiting the president’s ability to remove the director who heads the agency.
The law creating the independent agency after the 2008-09 crisis says its director can only be removed “for cause,” such as neglect of duty, and not over political differences. The court said that conflicts with the Constitution, which allows the president to remove executives for any reason.
The ruling came from a threejudge panel of the U.S. Court of Appeals for the District of Columbia Circuit.