Advertisement

Supreme Court may retain CFPB but curtail director's independence

By
Don Jacobson
The U.S. Supreme Court heard arguments Tuesday in a case seeking to abolish the Consumer Financial Protection Board. File photo by Mike Theiler/UPI
The U.S. Supreme Court heard arguments Tuesday in a case seeking to abolish the Consumer Financial Protection Board. File photo by Mike Theiler/UPI | License Photo

March 3 (UPI) -- Members of the U.S. Supreme Court indicated they were unlikely to abolish the U.S. Consumer Financial Protection Bureau as unconstitutional during oral arguments in a hearing Tuesday.

However, the tenor of the questions posed to attorneys suggested they could curtail the current independence of the agency's director from the executive branch.

Advertisement

Some of the justices' comments seemed to support the position of the Trump Administration in the case.

It is arguing that the legislation creating the CFPB -- established to protect consumers from predatory lending following the 2008 financial crisis -- was unconstitutional because the panel's head cannot be fired by the president.

Instead, the board was set up as a semi-independent entity under the auspices of the Federal Reserve and its chief can only be removed "for cause" such as personal malfeasance, rather than for political or policy differences.

In the case, the administration is challenging court precedents stretching back to the 1930s New Deal era allowing for the creation of independent federal boards and agencies set up to perform watchdog functions free from political influence.

That position has alarmed consumer advocates, but is backed by the U.S. business community.

While justices appeared to support the idea that the heads of such agencies should be answerable to the executive branch, they seemed less sympathetic to the broader contention that they are all unconstitutional and should thus be abolished and suggested the two issues could be severed.

Latest Headlines