The Supreme Court ruled Monday that the federal law that created the Consumer Financial Protection Bureau (CFPB) during the Obama administration unconstitutionally limited the reasons why the president could fire his director, but in doing so allowed the agency to continue operating , saying that the part of the law that requires certain reasons for the director’s dismissal is “separable” from the rest.
The CFPB is in part the brain of the former Democratic presidential candidate for Senator Elizabeth Warren. D-Mass., And was enacted by former President Obama in the wake of the 2008 recession and mortgage crisis. The high court ruling could affect the authority of dozens of other federal agencies with near-independent status, such as the Federal Reserve and the Social Security Administration.
“Therefore, we maintain that the CFPB structure violates the separation of powers. We continue to maintain that the removal protection of the CFPB Director is separable from the other legal provisions related to the authority of the CFPB. Therefore, the agency can continue to operate, but its director, in light of our decision, should be removed by the president at will, “the court stated.
SUPREME COURT DEFEATS THE LAW OF LOUISIANA ON RESTRICTIONS OF THE ABORTION CLINIC
Warren earlier this year criticized the effort, through this case, titled Seila Law LLC v. Consumer Financial Protection Bureau, to eliminate CFPB.
“Big banks and their allies will do anything to undermine @CFPB, including asking the Supreme Court to shut it down today,” he said. “We will not let President Trump gut the consumer agency and let the big banks fool customers again and bet on our economy.”
The ruling follows a past conflict over the agency’s director. In 2017, Obama-appointed CFPB leader Richard Cordray resigned and appointed the agency’s chief of staff, Leandra English. But President Trump used his authority to designate Mick Mulvaney, who was also serving as director of the Office of Administration and Budget at the time, as the acting director.
Seila Law LLC in 2017 declined to comply with a demand by the CFPB to release information related to an allegation that it engaged in illegal marketing practices, saying the agency was illegitimate because its director’s removal limits violated the separation of powers. The CFPB took Seila Law to court to compel him to turn over the documents and information in question, leading to the case that the court decided on Monday.
Monday’s ruling can be seen as a partial loss for Warren. The CFPB will remain but will be more subject to the vagaries of changes in presidential administrations. But she, in a tweet, seemed to see the glass half full.
“Let’s not lose sight of the big picture: After years of attacks on industry and opposition from the Republican Party, a conservative Supreme Court recognized what we all knew: the @CFPB itself and the law that created it is constitutional. The CFPB came to stay”. she said.
THE SUPREME COURT REVERSES THE APPEAL OF THE IMMATES, CLEANING THE PATH OF FEDERAL EXECUTIONS TO RESUME IN JULY
Monday’s ruling could also be an ominous signal to red states backing a lawsuit to invalidate the Affordable Care Act, also known as ObamaCare, for the removal of the financial penalty related to the individual mandate. The Trump administration has supported the effort, filing a report on it last week. The red states and the president argue that because there is no longer a financial penalty for not buying health insurance, the mandate can no longer be read as a tax and is unconstitutional. Furthermore, they say that the individual mandate is so closely tied to the intent of the law that the rest cannot be sustained without the mandate, that it is not “separable.”
“It has long been resolved that ‘a section of a statute can be disgusting to the Constitution without nullifying the entire act,'” Chief Justice John Roberts said in the majority opinion in the CFPB case.
After analyzing part of the debate behind the law, he continued: “These observations certainly confirm that Congress preferred an independent CFPB to a dependent one; but they shed little light on the critical question of whether Congress would have preferred a dependent CFPB tor no agency at all.… it is far from evident that Congress would have preferred no CFPB to a CFPB led by a removable Director at the discretion of the President. “
NAPOLITAN IN THE SUPREME COURT OF THE LOUISIANA RULE OF ABORTION
The popular Supreme Court publication SCOTUSblog acknowledged that part of the ruling, and its possible implications, in a tweet Monday.
“The tone of today’s decision that refuses to completely invalidate the CFPB suggests that the Court will similarly cut off part of Obamacare and refuse to revoke the entire statute when the next term decides that issue,” he said.
However, Carrie Severino, president of the conservative Judicial Crisis Network, said the ruling was a victory for the principle of separation of powers.
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“Today’s 5-4 decision in Seila Law LLC v. CFPB was a great victory for constitutionalism and separation of powers. Our editors believed that separation of powers was the important bulwark of freedom in the Constitution,” he said. . “Today’s decision, written by Chief Justice Roberts, reminds us that granting executive power to an unelected and irresponsible bureaucrat is anathema to our system of checks and balances.”
Judgment 5-4 was largely divided along ideological lines, with conservative judges saying that the limit on the president’s firing power was unconstitutional and liberal judges saying it was not. All the judges, however, agreed that it was not necessary to cancel the entire CFPD.
Bill Mears and Shannon Bream of Fox News contributed to this report.
