Corporate Accountability

Seila Law LLC v. Consumer Financial Protection Bureau

In Seila Law LLC v. Consumer Financial Protection Bureau, the Supreme Court is considering if it should hear a case that involves a constitutional challenge to the leadership structure of the Consumer Financial Protection Bureau (CFPB). Since its creation, the CFPB has played a vital role in protecting consumers from harmful practices of the financial services industry and preventing the types of abuses that led to the 2008 financial meltdown. The Bureau’s leadership structure is essential to its ability to play that role effectively.

Case Summary

The 2008 financial crisis decimated the American economy and caused millions of families to lose their homes. After months of evaluating the roots of this crisis and the types of reforms needed, Congress concluded that a major culprit was the failure of a fragmented and unaccountable consumer financial protection regime to safeguard homeowners from reckless financial products. To remedy this, Congress established a new agency, the Consumer Financial Protection Bureau (CFPB), that would have the independence needed to prevent a recurrence of those problems and respond to the challenges of an evolving financial marketplace. In the Dodd-Frank Act, Congress structured the Bureau to be led by a single director, rather than a multimember commission, to avoid the gridlock and delay to which commissions are susceptible. And to insulate the Bureau from industry pressure and political interference, while ensuring accountability, Dodd-Frank provided that its director may be removed by the president for good cause (“inefficiency, neglect of duty, or malfeasance in office”) but not for policy disagreements alone.

Petitioner Seila Law LLC provides legal services in connection with consumer debt. As part of an investigation, the CFPB sought documents from Seila Law, which refused to comply—arguing that the Bureau’s structure is unconstitutional. A district court disagreed, and the U.S. Court of Appeals for the Ninth Circuit affirmed. Seila Law then petitioned the Supreme Court to review the decision. While this petition was pending, the CFPB changed its longstanding legal position and agreed with the Trump Administration’s Department of Justice that its own structure violates the separation of powers. Soon after, CAC submitted a letter to the Court advising the Justices that if the case is granted, we intend to file an amicus brief on behalf of Senator Sherrod Brown, former Senator Christopher J. Dodd, and former Representative Barney Frank, and to request permission to participate in the oral argument as amicus curiae in defense of the CFPB’s structure. CAC has represented these clients in the past to defend the constitutionality of the Bureau in lower court cases such as PHH Corp. v. CFPB, CFPB v. All American Check Cashing, and CFPB v. RD Legal Funding.

Case Timeline

  • October 1, 2019

    CAC submits a letter to the Court indicating that if the case is granted, we intend to file an amicus brief and to request permission to participate in the oral argument

    U.S. Sup. Ct. Letter
  • October 18, 2019

    The Court grants the petition to hear the case

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