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Supreme Court orders restructuring of Consumer Financial Protection Bureau

Supreme Court orders restructuring of Consumer Financial Protection Bureau”

The Supreme Court of the United States on Monday handed President Donald Trump more authority over a federal agency charged with protecting consumers in the financial sector, empowering him to fire its director at will and ruling that the structure it was given by Congress violated the US Constitution.

The agency was created in 2010 at the behest of then-Harvard law professor and now Sen.

"The CFPB's single-Director structure contravenes this carefully calibrated system by vesting significant governmental power in the hands of a single individual who is neither elected by the people nor meaningfully controlled (through the threat of removal) by someone who is", Roberts wrote. When Trump took office, his DOJ took a stance against the CFPB, arguing the President should be able to remove the director at-will.

"The agency may ... continue to operate, but its Director, in light of our decision, must be removable by the President at will", Chief Justice John Roberts wrote.

But Warren said in a series of tweets in the wake of the Supreme Court's ruling that the "CFPB is here to stay".

It is headed by a single director who is nominated by the president and confirmed by the Senate for a five-year term. In organizing the CFPB, "Congress deviated from the structure of almost every other independent administrative agency in our history", Roberts wrote.

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The Trump administration declined to defend the CFPB and agreed with legal challengers who argued its structure was unlawful, abandoning the legal position of the Obama administration. But with the agency facing an unprecedented wave of consumer complaints as millions of laid-off workers deal with their creditors, lawmakers and consumer advocates charge that the bureau is exploiting the crisis to further a pro-industry agenda.

But the Supreme Court's conservative justices have insisted in the past that the president's executive power means he may remove top officials for any reason.

The decision was a victory for President Trump and for forces in the business community that have long sought to trim the sails of independent regulatory agencies, from the CFPB to multimember-led agencies, among them the Securities and Exchange Commission, the Federal Reserve Board, the Federal Communications Commission and many more.

The agency flexed its muscle under Cordray during the Obama years. The 9th U.S. Circuit Court of Appeals sided with the CFPB, ruling its structure comports with the Constitution.

The justices ruled in favour of California-based law firm Seila Law LLC, which challenged the agency's structure after being investigated by it. But under the Trump administration, the CFPB has scaled back its enforcement efforts. Former acting White House chief of staff Mick Mulvaney once called the CFPB a "joke" and co-sponsored legislation to get rid of it.



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