Lawyer Chosen to Defend CFPB Before Supreme Court Backs Agency Structure

With the Department of Justice and Consumer Financial Protection Bureau (CFPB) itself opting against defending the agency’s leadership structure in the upcoming challenge to its constitutionality, former U.S. Solicitor General Paul Clement has been appointed by the court to defend the Bureau. In this capacity, Clement recently filed a brief contending that the agency’s leadership structure does not violate separation of powers.

Seila Law, who brought the dispute against the CFPB, claims in its lawsuit that the agency’s director was given too much power under the Dodd-Frank Act, as the legislation allows the president to remove the agency’s leader only when there is cause.

Clement, however, wrote in his brief that “there is no actual contested removal, and the current Director [Kathy Kraninger] views herself as serving at the pleasure of the President.”

The Supreme Court will hear arguments in March and determine whether a president has the authority to remove a director without cause. Congress stated that the director can currently be removed in cases of “inefficiency, neglect of duty, or malfeasance in office.”

The main reason that Clement provided to maintain the CFPB’s structure is that there is no ‘removal clause’ in the Constitution. He wrote that the “constitutional text is simply silent on the removal of executive officers, which is hardly a promising basis for invalidating an Act of Congress.”

Clement also wrote that simple restrictions to the president’s authority “do not cross a constitutional line.” Lastly, he argued that each time the Supreme Court had to rule on restricting the president’s removal powers, the vote has not been close, so justices have upheld congressional restrictions.

Clement’s complete brief is available at https://www.supremecourt.gov/DocketPDF/19/19-7/128671/20200115125557702_19-7%20Seila%20Law%20LLC%20v.%20CFPB%20amicus%20br.pdf.