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PHH Corp. v. Consumer Fin. Prot. Bureau - 881 F.3d 75 (D.C. Cir. 2018)

Rule:

The United States Supreme Court's removal-power decisions have, for more than eighty years, upheld ordinary for-cause protections of the heads of independent agencies, including financial regulators. That precedent leaves to the legislative process, not the courts, the choice whether to subject the Consumer Financial Protection Bureau's (CFPB) leadership to at-will presidential removal. Congress's decision to provide the CFPB Director a degree of insulation reflects its permissible judgment that civil regulation of consumer financial protection should be kept one step removed from political winds and presidential will. We have no warrant here to invalidate such a time-tested course. No relevant consideration gives us reason to doubt the constitutionality of the independent CFPB's single-member structure. Congress made constitutionally permissible institutional design choices for the CFPB with which courts should hesitate to interfere. While the Constitution diffuses power the better to secure liberty, it also contemplates that practice will integrate the dispersed powers into a workable government. 

Facts:

The 2008 financial crisis destabilized the economy and left millions of Americans economically devastated. Congress saw a need for an agency to help restore public confidence in markets: a regulator attentive to individuals and families. So it established the Consumer Financial Protection Bureau (CFPB). Congress determined that, to prevent problems that had handicapped past regulators, the new agency needed a degree of independence. Congress gave the CFPB a single Director protected against removal by the President without cause. The law was challenged as an unconstitutional impediment to the President's power.

Issue:

Is a statute providing the Director of the Consumer Financial Protection Bureau (CFPB) with a five-year term in office, subject to removal by the President only for "inefficiency, neglect of duty, or malfeasance in office" consistent with the Constitution, which vests executive power in a President charged to take care that the laws be faithfully executed?

Answer:

Yes

Conclusion:

The Court held that the Dodd-Frank Wall Street Reform and Consumer Protection Act, which provided the Director of the Consumer Financial Protection Bureau (CFPB) with a five-year term in office, subject to removal by the President only for inefficiency, neglect of duty, or malfeasance in office, was consistent with the Constitution. It explained that Congress established the independent CFPB to curb fraud and promote transparency in consumer loans, home mortgages, personal credit cards, and retail banking. It further added that the Supreme Court eighty years ago sustained the constitutionality of the independent Federal Trade Commission, a consumer-protection financial regulator with powers analogous to those of the CFPB. In doing so, the Court approved the very means of independence Congress used here: protection of agency leadership from at-will removal by the President. 

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