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1 1 (June 30, 2020)

handle is hein.crs/govdauk0001 and id is 1 raw text is: Resarh Servic Supreme Court Rules CFPB Structure Unconstitutional: Implications for Congress June 30, 2020 On June 29, 2020, in the case Seila Law v. Consumer Financial Protection Bureau (CFPB), the Supreme Court held in a five-to-four decision that the statutory provision limiting the President's authority to remove the director of the CFPB violated the Constitution by infringing on the President's powers to execute the laws. The opinion provides guidance on Congress's authority to insulate agencies from presidential influence by explaining that, under current precedent, Congress may shield executive branch officials from removalby the President only in two limited circumstances: (1) when so-called inferior officers have limited duties and no policymaking or administrative authority, and (2) when a multi- member body of experts does not wield substantial executive power. In the view of the majority, the CFPB's leadership structure, which included a sole director wielding substantial power, did not fit within either exception and was therefore unconstitutional. Despite this determination, the Court held that the restriction limiting the President's ability to remove the CFPB Director is severable from the rest of the statute, which means the agency may otherwise continue to exercise the powers assigned by Congress with a Director who is removable at the President's discretion. This Sidebar explains the Court's holding in Seila Law, summarizes two partially concurring and dissenting opinions, and previews considerations for Congress. Background In the wake of the 2008 financial crisis, Congress created the CFPB in 2010 to serve as a new, independent financial regulator. The agency is charged with administering 18 preexisting federal consumer protection statutes, and it is empowered to conduct investigations, issue subpoenas, initiate administrative adjudications, conduct administrative proceedings, and prosecute civil actions in federal court. To ensure the CFPB could execute its pro-consumer mission without undue political influence, Congress exempted the agency from the usual appropriations process and provided that the agency would be led by a single director appointed by the President to a five-year term, removable by the President only for inefficiency, neglect of duty, or malfeasance in office. As part of an investigation into whether California law firm Seila Law LLC violated telemarketing laws, in 2017 the CFPB demanded Seila Law produce information and documents related to its business practices. Seila Law asserted that the demand was invalid because the CFPB's leadership structure Congressional Research Service https://crsreports.congress.gov LSBI0507 CRS Lega i&sebar Prepared .'or Membersand C o m m ; .. e e s o f Cen g clC o n ---------------.. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------..........

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