DOJ Backs CFPB in SCOTUS Brief

Feb 28, 2020Litigation, News

Next week, the U.S. Supreme Court will hear arguments in the long-awaited Seila Law case about the constitutionality of the Consumer Financial Protection Bureau (CFPB)’s leadership structure. While the Trump administration has argued that under the Bureau’s current structure, its singular director is protected from being held accountable, the Department of Justice recently filed a brief urging the Court to allow the CFPB to continue doing its work.

In the brief, the DOJ said that “the bureau is the federal government’s only agency solely dedicated to consumer financial protection.” DOJ also expressed concern that ruling against the CFPB could cause many financial issues for consumers, banks, credit card companies, and mortgage lenders.

Seila Law, the California debt relief firm that brought the CFPB constitutionality case to the Supreme Court, argued that the justices should leave the decision to Congress. However, if the court was going to agree on a solution, Seila advocated for the invalidation of the entire Bureau.

While the Justice Department has backed Seila’s petition, it specified that the justices should try to solve any constitutional flaw they found in the CFPB, instead of eliminating the agency altogether. If they ignore the constitutional questions, DOJ said in the brief that many would still have doubts about the CFPB’s mission.

According to the Justice Department, the Bureau’s mission is an important one. Eradicating the CFPB “would lead to grave doubt as to the validity of those rules and eliminate the safe harbors Congress established for regulated entities who relied in good faith on them,” DOJ’s brief said.

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