Supreme Court Declares Single-Director Structure of CFPB Unconstitutional

The U.S Supreme Court on Monday declared the single-director structure of the Consumer Financial Protection Bureau unconstitutional.

The agency’s configuration is “incompatible with the structure of the Constitution, which—with the sole exception of the Presidency—scrupulously avoids concentrating power in the hands of any single individual,” the court said.

As currently structured, the CFPB director could only be removed by the President for cause. The Court will allow the CFPB to continue to operate with its single director, but that director may now be removed by the President at will.

The CFPB was created during the Obama Administration as part of Dodd-Frank. The CFPB, under President Obama and then-Director Richard Cordray, strictly enforced consumer protection law.

When President Trump took office and Corday resigned, his acting Director, Mick Mulvaney, and current Director Kathy Kraninger, took a much more hands-off approach.

While Obama defended the single-director structure, the Trump Administration abandoned that defense.

The Supreme Court Monday agreed with the Trump Administration.

Credit union trade groups have argued that the CFPB should be governed by a commission, much like the Federal Trade Commission.

Spread the word. Share this post!