Court Ruling on Constitutionality of CFPB Keeps Bureaucrats Unaccountable


Today, the U.S. Court of Appeals for the District of Columbia Circuit issued a disappointing ruling on the constitutionality of the controversial Consumer Financial Protection Bureau. Competitive Enterprise Institute Vice President for Strategy Iain Murray offered the following comment:

The Court has given future heads of agencies like the Consumer Financial Protection Bureau license to wield enormous power with little accountability or constraint. This outrage to the spirit of the Constitution needs to be corrected by the Supreme Court and by Congress, which made the original mistake in giving the CFPB so much power with so little accountability.

The decision in PHH vs. CFPB overturns a portion of the 2016 decision by a three-judge panel that ruled against the CFPB’s structure, which relies on a sole director only fireable by the U.S. president for “inefficiency, neglect of duty, or malfeasance.”

CEI also has a pending constitutional challenge against the CFPB, State National Bank of Big Spring v. CFPB. The CEI lawsuit, currently before the U.S. District Court for the District of Columbia, argues that the structure of the CFPB violates the Constitution’s separation of powers because the agency is insulated against meaningful checks by the legislative, executive, and judicial branches of government.