Seila Law v. CFPB — U.S. Supreme Court Removes Limitations on President’s Ability to Remove CFPB Director, but Leaves CFPB Otherwise Intact: Court’s Decision Leaves Open Questions of the Validity of Prior CFPB Actions and the Structure of Other Federal Agencies

Sullivan & Cromwell LLP - July 1, 2020
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On June 29, 2020, the U.S. Supreme Court struck down limitations Congress placed on the President’s ability to remove the Director of the Consumer Financial Protection Bureau (CFPB).  The Court determined that various aspects of the Director’s tenure and powers—including that the Director is the sole decision-maker for the CFPB, has a five-year term, and is removable by the President only for cause—made the Director unique among other federal agency heads in the Director’s isolation from presidential oversight.  This isolation, the Court held, violates the President’s authority under Article II of the U.S. Constitution to control the Executive Branch.  The Court declined, however, to strike down the rest of the statute creating the CFPB, holding instead that the for-cause removal provision could be severed from the rest of the legislation, leaving the agency otherwise intact.