The Supreme Court has decided to hear a case challenging the constitutionality of the structure of the Consumer Financial Protection Bureau (“CFPB”). The CFPB was created in 2010 under the Dodd-Frank Act, which provided that the director of the CFPB could be removed by the president for good cause. The petitioner in Seila Law, a debt resolution law firm, objected to a demand from the CFPB for documents and information regarding the firm, on the grounds that the CFPB’s structure is unconstitutional. The case made its way from the Central District of California through the Ninth Circuit Court of Appeals, which found that the CFPB’s structure is constitutionally permissible. Consumer Financial Protection Bureau v. Seila Law LLC, 923 F.3d 680, 682-84 (9th Cir. 2019). The petition for writ of certiorari was granted in October of 2019.

Interestingly, the CFPB took the position in its brief on the petition for writ of certiorari that its single-director structure is, in fact, unconstitutional. CFPB Director Kathleen Kraninger outlined this position in a letter to Senate Majority Leader Mitch McConnell, arguing that the unconstitutionality of the for-cause removal provision does not affect the statutory responsibilities of the CFPB or its ability to remain fully operative. In taking up this issue, the Supreme Court will consider whether the structure of the CFPB violates the separation of powers, and if so, whether 12 U.S.C. § 5491(c)(3), establishing the CFPB, can be severed from the Dodd-Frank Act.