- The Washington Times - Monday, January 14, 2019

The Supreme Court on Monday allowed the Consumer Financial Protection Bureau to continue operating by refusing to hear a challenge that had argued the agency set up after the 2008 financial collapse was unconstitutional.

The ruling is a symbolic victory for 2020 presidential candidate Sen. Elizabeth Warren, an architect of the CFPB.

Opponents of the CFPB have long argued the Wall Street regulator’s structure, with a single director whose term outlasts a president and a budget independent of Congress, violates the founders’ vision of checks and balances.

They have mounted multiple challenges to the bureau, winning once while losing elsewhere, including a decision by the federal circuit appeals court in Washington, D.C., last year.

The justices, without comment, declined to take an appeal of that ruling.



“We are disappointed by the Supreme Court’s decision to turn down the case,” said Sam Kazman, general counsel for the Competitive Enterprise Institute, one of the conservative groups that had pushed for the justices to hear the matter.

Mr. Kazman said he hoped some other cases still pending will earn time before the court.

The CFPB was created in the 2010 Wall Street Reform and Consumer Protection Act, also known as Dodd-Frank in honor of the two Democrats who led the writing of the legislation.

The agency writes and oversees rules for financial institutions, focusing largely on mortgages and credit cards.

While conservatives complained about potential policy overreach, the legal battles have focused on the structure of the CFPB, which places all its power in a single director who sets his own budget, serves a term of at least five years, and cannot be removed except for good cause.

“In the history of the United States, no individual has ever wielded such expansive executive enforcement authority over an entire sector of private economic activity, devoid of the checks and balances the Constitution’s separation of powers requires,” CEI and other CFPB opponents said in their petition to the high court.

The Trump administration said in its briefs that it does believe the CFPB needs to be reviewed, but said the current case wasn’t a good test, partly because of complex jurisdiction issues and also because Justice Brett M. Kavanaugh might have to sit out because he was on the lower court panel.

The administration said it’s worth having a full nine-justice panel in place if it’s going to take up such an important case.

Deputy Solicitor General Jeffrey B. Wall said other cases are winding their way through lower courts that may be better tests.

Joseph Lynyak III, a partner at Dorsey & Whitney, said it’s unfortunate Congress hasn’t stepped in to create a board to oversee the bureau similar to the structure of the Federal Deposit Insurance Corporation and the Federal Trade Commission.

“This would moderate the wide swings in policy and enforcement that have occurred at the CFPB as a result of changes in the administration, as well as bring to the table highly qualified individuals who would have a vote in the complex area of the consumer financial services industry,” Mr. Lynyak said.

Ms. Warren, as a Harvard University professor, had pushed for the creation of such a Wall Street cop, and had been in line to be the first director, but President Obama’s team figured it couldn’t get her through Senate confirmation.

Instead, it went with a Warren acolyte, Richard Cordray, a former attorney general of Ohio who was given a recess appointment before winning full confirmation.

Mr. Cordray resigned in 2017 to make a failed bid for Ohio governor. He tried to hand-pick his replacement, but President Trump countered him, naming another temporary replacement in his own White House budget director, Mick Mulvaney.

The courts sided with the president on that, and Mr. Mulvaney served until late last year, when the Senate confirmed Kathleen Kraninger to the post for a five-year term.

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