Pascrell Assails Supreme Court Dismantling of Consumer Protection Watchdog

Supreme Court strikes down law shielding consumer board director from firing

The firm previously said that the CFPB's leadership by a single director who was removable "for cause" ignored the U.S. Constitution's separation of powers rule. However, they believed that more should be done to hold the CFPB accountable such as making the agency's funding subject for approval and giving it a board of directors. "Not Donald Trump. Not Congress".

In her tweets, Warren accused the CFPB's current director, Trump appointee Kathy Kraninger, of gutting portions of the agency and urged her to "stop working for the crooks and start working for working families".

Warren touted the bureau during her presidential campaign, saying it returned more than $12 billion to consumers under the Obama administration. Ultimately, the Chief Justice Roberts wrote that the FTC directorate, which consists of several members serving staggered terms and is bipartisan, was fundamentally different from the single-director CFPB.

Confirming years of complaints, the U.S. Supreme Court on Monday decided the structure of a federal consumer protection agency created during the Obama Administration is unconstitutional. Elizabeth Warren (D-Mass.) - who spearheaded the creation of the agency - celebrated the fact that the agency would be preserved.

Not only that, but the Court said that the Bureau's director can be removed by the President of the United States "at will".

"Instead of placing the agency under the leadership of a board with multiple members, Congress provided that the CFPB would be led by a single director, who serves for a longer term than the president and can not be removed by the president except for inefficiency, neglect or malfeasance". When it created the consumer finance watchdog agency in the wake of the 2008 financial crisis, Congress sought to protect it from political influence, but opponents argued that shielding the director from removal violated the separation of powers principle of the constitution. Not the banking industry. The Supreme Court, and other courts, should not act as unelected legislatures to enact Republican policy objectives by judicial fiat that could not be won electorally at the ballot box.

The Supreme Court decision sided with Seila Law - a California law firm which was in the crosshairs of the CFPB over promotions of debt relief services. Roberts and fellow conservative justices Samuel Alito and Brett Kavanaugh said the restrictions could be stricken from the law. It was part of the 2010 Dodd-Frank Act and was charged with protecting consumers from abuses by financial institutions.

But Seila asked the CFPB to put its request for records aside, arguing it was invalid because the watchdog agency's structure was unconstitutional. Former acting White House chief of staff Mick Mulvaney once called the CFPB a "joke" and co-sponsored legislation to get rid of it. The president then nominated Kraninger to permanently helm the CFPB, and she was narrowly confirmed by the Senate in December 2018.