Removing Barriers Blog

U.S. Supreme Court Hears Arguments in CFPB Constitutionality Case
Posted March 03, 2020 by CUNA Advocacy

The U.S. Supreme Court heard arguments in Seila Law LLC v. Consumer Financial Protection Bureau on Tuesday.  Last December, CUNA filed an amicus brief arguing that a multi-member commission established by the political branches is the best remedy to cure the CFPB’s constitutional defects while preserving the consumer protection benefits of the agency.

During the arguments, the Supreme Court heard from counsels for Seila Law LLC, the CFPB, and Mr. Paul Clement as special amicus curiae appointed by the Court to defend the CFPB’s constitutionality.  The Court also heard from a counsel for the U.S. House of Representatives, which had filed a “friend of the court” brief in the case. 

The parties offered little on the appropriate remedy if the Court concludes the CFPB’s structure violates the separation of powers. The most colorful exchange on this issue came from Justice Kavanaugh seemingly searching for how to read the severability clause in Dodd-Frank. However, in the PHH Corp. decision, then-Judge Kavanaugh wrote an exhaustive dissent to the D.C. Circuit’s en banc decision, in which he argued that the for-clause provision should be severed because of the severability clause. This case may present an opportunity for him to reconsider his prior decision. 

On the merits of the separation-of-powers question, the focus of the Justices’ questions was almost exclusively on line drawing. The questions for petitioner’s counsel and the Solicitor General mainly came from Justices Ginsburg and Kagan, and, to lesser degree, the Chief Justice. They honed in on why the appropriate line is a single-member head versus a multimember, as opposed to some other distinction. To this point, Justice Kagan argued that the line drawing is better suited for Congress—not the courts—and that the focus shouldn’t be on removal but rather appointment. To this line of questioning, the General responded: “[T]he purpose of separation of powers is not to protect the President from Congress or to protect Congress from the President but to protect the liberty of the people by enforcing the structural constraints of our Constitution.” He then discussed the underlying liberty interests.

Led by Justice Gorsuch, several Justices questioned Mr. Clement and Doug Letter (counsel to the House of Representatives) about line drawing if the CFPB is deemed constitutional: “[I]f we were to approve single-member agencies without any presidential removal power – let’s just suppose that – we would run into questions about the cabinet, for example, which are just agencies, right? So what – how would you have the Court write an opinion to distinguish this case from that?” Neither advocate had a firm answer, which came up time and again during the argument. 

A transcript of the arguments can be found here. Audio of the arguments will likely be available later this week.