A challenge to the structure of the Consumer Financial Protection Bureau (CFPB) was dismissed by the U.S. Supreme Court on Monday (Jan. 14) when it declined to take up a Texas case.
According to a report in Reuters, citing the Supreme Court, the court turned away a Texas bank's challenge to the CFPB, a case that could have paved the way for greater presidential power over the independent agency. The CFPB, which has long been hated by many Republicans, has already seen its power diminished by President Donald Trump. Reuters reported that while the justices declined to hear an appeal by State National Bank of Big Spring, it may not be the end to legal fights against the CFPB. Reuters noted three other cases focused on the CFPB are headed to the Supreme Court.
Only eight of the nine justices on the Supreme Court participated in the decision to not hear the case. Trump appointee Brett Kavanaugh recused himself; Reuters speculated that he may have done so because he has been involved in an earlier ruling in the case before he was appointed to the Supreme Court. The court is in a 5-4 conservative majority, noted Reuters.
The heart of the issue is whether the CFPB's director has too much power, thus is violating the U.S. Constitution, which gives the president the right to appoint and remove federal officials. If the bank got a ruling in its favor, the president would be able to fire the head of the agency for any reason.
“The case raises constitutional issues of major importance regarding the [CFPB], an agency that wields massive power over the economic activities of the public and sets a dangerous precedent for unaccountable federal bureaucracy,” said Sam Kazman of the Competitive Enterprise Institute, a conservative group involved in the challenge, reported Reuters. Meanwhile Democrats have said the watchdog agency is vital to protecting consumers.