Supreme Court rules on CFPB constitutionality

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The Consumer Financial Protection Bureau (CFPB), formed in the wake of the 2008 financial crash, should continue to exist even though one of the legal provisions that created it is unconstitutional, a divided Supreme Court ruled this morning.

The portion of Roberts' opinion holding that the for-cause removal provision could be severed from the rest of the law was joined by Alito and Kavanaugh. Ultimately, the Chief Justice Roberts wrote that the FTC directorate, which consists of several members serving staggered terms and is bipartisan, was fundamentally different from the single-director CFPB. In a written statement, Roberts claimed that the C.F.P.B. director holds broad authority over the US economy despite having no boss or peers to report to. "Yet the director wields vast rule-making, enforcement and adjudicatory authority over a significant portion of the US economy".

The majority held in this case that the structure of this agency is contrary to the Constitution's general opposition to concentrating power in a single person.

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The Trump administration had argued that the restrictions improperly limited the power of the president. Roberts was joined in the decision by the other four conservative justices, CNBC reported.

"The Supreme Court's decision to team up with Donald Trump to destroy the Consumer Finance Protection Bureau is a titanic outrage", said Rep. Pascrell, who voted to create the CFPB.

Justices Elena Kagan, Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor dissented.

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The decision caps a 10-year legal battle over the CFPB, which was created to protect consumers from abusive financial-industry practices on products like mortgages, student loans and credit cards. All Americans who have credit cards, home mortgages or investments with major USA financial institutions have a stake in the CFPB and its regulation of Wall Street.

While the narrow holding in the case may not seem particularly significant, legal experts pointed out the language in Roberts' decision, which espoused a very broad view of executive power, could have lasting repercussions for increasing presidential power. Elizabeth Warren (D-Mass.), who was a bankruptcy law professor and consumer advocate before assuming office.

The agency flexed its muscle under Cordray during the Obama years. Although this decision might be described as a victory for the financial services industry - it subjects the CFPB's director to removal by the incumbent president - it did not go as far as some would have wished because the CFPB itself will survive.

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The CFPB was the brainchild of Elizabeth Warren, the MA senator and former Democratic presidential candidate. Both have passionately argued in its defense. Mulvaney, who also heads the White House Budget Office, started dismantling the agency. Rather, the Trump administration agreed with Seila Law that the CFPB's structure was unconstitutional. "The CFPB is here to stay".

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