SCOTUS rules CFPB structure unconstitutional, declines ABA’s petition to hear FOM case

The U.S. Supreme Court today issued its decision in the lawsuit brought by Seila Law challenging the CFPB’s single-director structure, determining that it is unconstitutional. In addition, it declined to hear the lawsuit brought by the American Bankers Association against the NCUA over the agency’s 2016 field of membership (FOM) rule.

NAFCU has long held that the CFPB’s leadership structure should be reformed to a commission-based model to ensure transparency and accountability and supported legislative efforts to do so.

“With today’s Supreme Court decision allowing the President to remove the CFPB Director at will, it is essential Congress advance legislation establishing a bipartisan commission at the bureau to promote greater transparency, accountability and long-term stability,” said NAFCU President and CEO Dan Berger. “A bipartisan board offers stable, long-term leadership that would better provide for the needs of consumers. NAFCU will continue to advocate for Congress to pass legislation reforming the CFPB’s single-director leadership structure into a bipartisan board.”

In its CFPB decision, the Supreme Court found that the bureau’s “leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the separation of powers.” Despite its unconstitutional structure, the court said the agency may continue to operate, so long as the director is subject to removal by the president at will.


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