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Consumer Financial Protection Bureau's structure ruled constitutional

Appeals court decision a blow to agency's opponents

Sipa USA/TNS

Richard Cordray, director of the Consumer Financial Protection Bureau, testifies in 2016, before the Senate Committee on Banking, Housing and Urban Affairs.
Sipa USA/TNS Richard Cordray, director of the Consumer Financial Protection Bureau, testifies in 2016, before the Senate Committee on Banking, Housing and Urban Affairs.

WASHINGTON — A federal appeals court ruled Wednesday the Consumer Financial Protection Bureau’s structure is constitutional in a setback to opponents of the independent watchdog agency created in the aftermath of the financial crisis.

Congress acted appropriately in mandating that the bureau’s single director, who serves a five-year term after being nominated by the president and confirmed by the Senate, only can be removed by the president for inefficiency, neglect of duty or malfeasance in office, according to the 7-3 ruling by the U.S. Court of Appeals for the District of Columbia.

The decision reverses a 2-1 ruling in 2016 by a three-judge panel of the court that found that bureau’s structure violated the Constitution’s separation of powers because it limited the president’s authority.

The bureau appealed that ruling to the full court with the backing of the Obama administration, which had strongly supported the agency. Most Republicans have criticized the bureau as wielding too much authority over credit cards and other consumer financial products and for not having full congressional oversight. Richard Cordray, the Obama appointee who was the bureau’s first director, resigned in November, several months before his term ended. That triggered legal battle over the acting leadership of the bureau.

President Donald Trump appointed Mick Mulvaney, the White House budget director and an outspoken bureau opponent, to be the agency’s acting chief. In a last-minute move before his resignation, Cordray had appointed Leandra English, his chief of staff, to deputy director.

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