The single-director makeup of the CFPB does not interfere with the president’s ability to perform his duties and therefore, it is constitutional, the beleaguered agency argues in its brief for a federal appeals court.
“The Bureau’s structure does not interfere with the ability of any branch of government to perform its assigned functions, and therefore does not interfere with the separation of powers,” the agency contends.
The agency and its director, Richard Cordray are taking shots from all sides. House Financial Services Chairman Jeb Hensarling (D-Texas) told Cordray Wednesday that President Trump has the power to fire him regardless of the appellate court ruling.
That suit challenges the section of Dodd-Frank that allows the president to only remove the CFPB’s director for cause.
In the suit, filed by PHH, a mortgage company, a panel of the U.S. Circuit Court of Appeals for the District of Columbia ruled that the structure of the CFPB is unconstitutional because it is governed by a single director who can only be removed for cause. The panel said that the president should be able to fire the director for any reason.
However, the appeals court granted a request by the agency to have the entire appellate court consider the ruling.
The Obama Justice Department sided with the CFPB in the suit, but the Trump White House has changed direction and argued that the makeup of the CFPB is unconstitutional.
While many Republicans have called on Trump to fire Cordray, he has not yet done so.
“This case began as a challenge to a kickback scheme orchestrated by a mortgage lender, Respondent PHH, but it morphed into a constitutional attack on the government’s primary enforcer of consumer financial laws,” the CFPB states in its brief.
The Supreme Court has repeatedly recognized that Congress can create independent agencies, and that the officers running those agencies cannot be removed by the president without cause, the CFPB states.
The CFPB concedes that most independent agencies are run by multi-members commissions. However, the unique structure of the CFPB does not render it unconstitutional, the agency argues.
