SCOTUS decision permits president to fire CFPB director at will

The U.S. Supreme Court gave President Donald Trump a partial win this week with a ruling that brought a largely unaccountable federal watchdog agency under at least marginal control of the executive branch.

As the Washington Examiner reported, a 5-4 decision on Monday found that the leadership instruction of the Consumer Financial Protection Bureau was unconstitutional and that its director could be fired at will by the president.

Previously, the CFPB head could only be removed “for cause,” a high bar that, when combined with limited congressional oversight, made the head of the agency largely untouchable.

History of the agency

Despite its ruling against the structure, the court did not support arguments from the Trump administration in favor of disbanding the bureau altogether.

The CFPB was initially designed by U.S. Sen. Elizabeth Warren (D-MA) and passed into law during the early years of the Obama administration in the aftermath of a major recession.

Though appointed by the president and confirmed by the Senate for a five-year term, once installed its director became all but impossible to remove prior to the completion of a term.

Richard Cordray was the first director and was replaced in 2017 by Mick Mulvaney. He was in turn replaced by current Director Kathy Kraninger, who assumed the position in December 2018.

Impact of the ruling

Despite its potential ramifications for her position, Kraninger praised the decision for finally brining clarity to the questions regarding her agency’s leadership.

“Today’s Supreme Court decision finally brings certainty to the operations of the Bureau,” she tweeted. “We will continue with our important mission of protecting consumers with no question that we are fully accountable to the President. Consumers and market participants should understand that the same rules continue to govern the consumer financial marketplace.”

As for Warren, she downplayed the ruling’s significance and focused on the fact that the agency is allowed to remain intact.

She tweeted that it is “still an independent agency” and its director “still works for the American people” instead of Trump, Congress, or the banking industry.

Despite its noble intention of protecting consumers from fraudsters, many critics have complained about the CFPB’s lack of accountability. Hopefully, this week’s Supreme Court ruling will allow the agency to focus on its mission while still facing adequate oversight.

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