Press Releases

Republican House Leaders and Financial Services Committee Members Argue CFPB Structure Violates Article II of U.S. Constitution

Washington, December 19, 2019 -

House Minority Leader Kevin McCarthy (CA-23), Minority Whip Steve Scalise (LA-1), and a majority of the Republican members of the House Financial Services Committee, led by Ranking Member Patrick McHenry (NC-10) filed an amicus brief to assist the Supreme Court as it considers the constitutionality of the Consumer Financial Protection Bureau (CFPB). The case—Seila Law LLC v. Consumer Financial Protection Bureau—focuses on the scope of the President’s authority to remove the CFPB Director.

As Republicans have stated since the passage of the partisan Dodd-Frank Act, Democrats created an unaccountable agency and regret they didn’t go far enough in mandating outcomes at the CFPB. Throughout the year, Financial Services Committee Democrats have attempted to curtail the current CFPB Director’s actions and rejected Republicans’ attempts to meaningfully reform the structure of the Bureau by putting it on budget and creating a bipartisan board.

In the brief, Members argue that the CFPB’s structure insulates the agency not only from presidential control, but from congressional control as well:

“Even more troubling, the CFPB also operates without the strings attached to Congress’s power of the purse. ... Unlike other executive agencies, the CFPB operates based on an independent funding stream that comes directly from the Federal Reserve, id., “outside of the congressional appropriations process.”

Moreover, the Brief argues that a restriction on the President’s ability to remove the CFPB director at-will violates the Constitution’s separation of powers:

“[T]his case presents a novel question that this Court has never addressed: May Congress restrict the President’s ability to remove a principal executive officer? The answer to that question is no. ‘Our Constitution was adopted to enable the people to govern themselves,’ which in turn ‘requires that a President chosen by the entire Nation oversee the execution of the laws.”

However, if the Court were to sever the removal restriction—as broadly provided in the Dodd-Frank Act—and give the President the power to remove the CFPB director at-will, it would radically reshape the agency, placing the CFPB fully within the President’s control but still wholly unaccountable to Congress:

“The removal restriction is not ‘severable’ because it is a fundamental feature of the CFPB’s design. It is not an extraneous feature that can be excised by judicial fiat. Congress did not authorize the President to control the CFPB’s vast array of statutory powers, and never even considered doing so. For this Court to do so now would be a major usurpation of the legislative role, granting powers to the President that Congress never authorized him to wield.”

The Members argue if the Supreme Court strikes down the removal restriction that the Court should likewise invalidate the CFPB’s statutory powers and send this issue back to Congress to resolve:

“In fact, amici have already demonstrated that Congress can and should address any constitutional deficiencies through the legislative process. Since the enactment of the Dodd-Frank Act, Republicans in Congress, including amici, have proposed legislation that would allow the President to remove the agency’s Director with or without cause, subject the agency to the congressional appropriations process, and to restructure the agency as a multi-member bipartisan commission, among other proposals.”

Republicans remain committed to working with Democrats to improve the structure of the CFPB for the good of all American consumers.

Read the full amicus brief here.

Print version of this document