Supreme Court Invalidates Restriction on President’s Power to Remove the CFPB Director

On June 29, 2020, the Supreme Court issued its opinion in Seila Law LLC v. Consumer Financial Protection Bureau, slip op. No. 19-7. The decision resolves a long-disputed issue regarding the constitutionality of the structure of the Consumer Financial Protection Bureau (CFPB or the Bureau)—namely, whether the Dodd-Frank Act’s statutory restriction on removal of the CFPB Director is consistent with the President’s powers in Article II of the Constitution. In a 5-4 decision, the Supreme Court held the restriction unconstitutional and invalidated it. At the same time, the Court rejected the argument that the entire CFPB should be invalidated due to the constitutional defect, and it left other remedial issues, such as the effect of the decision on pending Bureau matters, for lower courts to decide.