SCOTUS rules that the President can fire the head of the CFPB at will.

[brucejoel99]

The Supreme Court has ruled in Seila Law v. CFPB that the CFPB's leadership structure - which features a single head removable only for inefficiency, neglect, or malfeasance - violates the separation of powers (in that it places a limit - imposed by Congress, a co-equal branch of government - on the President's Article II authority over executive branch officials).

The agency survives, with only its 'for-cause' removal provision within the Dodd-Frank Act declared unconstitutional.

Written by Chief Justice Roberts, the ruling holds that said removal provision CAN indeed be severed from the other statutory provisions bearing on the CFPB's authority. "The agency may therefore continue to operate, but its Director, in light of our decision, must be removable by the President at will."

[brucejoel99]

The Supreme Court has ruled in Seila Law v. CFPB that the CFPB's leadership structure - which features a single head removable only for inefficiency, neglect, or malfeasance - violates the separation of powers (in that it places a limit - imposed by Congress, a co-equal branch of government - on the President's Article II authority over executive branch officials).

The agency survives, with only its 'for-cause' removal provision within the Dodd-Frank Act declared unconstitutional.

Written by Chief Justice Roberts, the ruling holds that said removal provision CAN indeed be severed from the other statutory provisions bearing on the CFPB's authority. "The agency may therefore continue to operate, but its Director, in light of our decision, must be removable by the President at will."

Serious, real question:

How do you square this with the Federal Reserve, which is structured much the same way, with a Chairman immune from firing?

The Federal Reserve System is still governed by its multimember Board of Governors (of which the Chair is merely a member in much the same way that the Chief Justice's presence on the Supreme Court counts no more than that of any Associate Justice), & is therefore permitted by this decision to retain its for-cause removal protections. In contrast, the CFPB is led by a single Director who obviously (&, indeed, inherently) can't be described as a multimember body that's able to retain its for-cause removal protections.

[brucejoel99]

What a legally nonsensical, morally abhorrent decision.

I mean, I also disagree with the decision on principle, but I wouldn't go that far. Perhaps it's morally abhorrent in furthering the unitary executive dogma, but if that's the case, then it's the Vesting Clause itself which is morally abhorrent here, in which case the correct remedy would be a constitutional amendment.

The clear issue here was that the CFPB had rule-making authority and enforcement power and a director that couldn't be removed at-will, which was unprecedented & didn't fall in line with the traditional scope of regulatory authority as based on the Vesting Clause: that "[t]he executive power shall be vested in a President of the United States." With that in mind, it's reasonable to not want an individual making political decisions that potentially tie the hands of the executive when the executive didn't appoint said individual. At least with a multimember board, power is diffused whereas the CFPB has just been run by a Director as its own fiefdom. That's really all there was to it.

At the end of the day, this decision is still legally sound because it was just the Supreme Court determining that Congress doesn't have the constitutional authority to create an executive agency headed by a single individual whom the President can't dismiss at-will, which is a reasonable determination given that the structure of the CFPB itself is reasonably objectionable in vesting so much authority in such a single individual who isn't accountable to the political process.

[brucejoel99]

This will bite them in the ass when president Biden fires her.

Rich Cordray agrees.

[brucejoel99]

In retrospect, what an own goal for the plaintiffs!

To think, they could've ensured a Trump lackey sabotaging Biden's consumer protection agenda for 3 whole years if they'd just kept their mouths shut. Now, she'll just get the boot from Biden on Day 1 instead.

[brucejoel99]

Can that same principle be applied to the USPS Board of Governors?  If so, President Biden can get rid of Postmaster General Louis Dejoy much faster than anyone thinks, and stop him from further sabotaging the Postal Service in preparation for its eventual privatization. 

No, multimember boards are permitted by current precedent to retain their for-cause removal protections.