It’s not every day that a federal court declares a government agency’s structure unconstitutional. And yet that’s exactly what happened to the Consumer Financial Protection Bureau earlier this month.
On October 11th, the US Court of Appeals for the DC Circuit ruled that the CFPB cannot continue to operate under the leadership of a lone individual unencumbered by any branch of government. In stark contrast to other federal agencies, the Bureau has thus far had a single director, Richard Cordray, who could only be removed from his position “for cause” and not at the president’s volition.
This decision structures the CFPB more like the US Treasury and other agencies that operate independently of the government but remain subject to federal oversight. The court also tossed out a $109 million fine the CFPB had ordered against PHH—the mortgage lender whose complaint prompted the case.
If Democrats and Republicans do not share control of the agency, there isn’t much anyone other than the president can do to challenge or reform it.