CFPB structure ruled unconstitutional

by Ryan Smith11 Oct 2016

A federal appeals court has ruled that the structure of the Consumer Financial Protection Bureau is unconstitutional.

The US Court of Appeals for the District of Columbia ruled that the CFPB’s structure violated the Constitution’s separation of powers because the agency’s director lacks enough oversight – in particular, he isn’t sufficiently answerable to the president, according to a Wall Street Journal report.

The decision came as the court set aside a CFPB enforcement action against mortgage lender PHH.

While the court rejected the notion of dissolving the agency, it said that the president needed the power to remove the CFPB’s director at will, and to supervise the director, according to the Journal. Currently, the director of the CFPB can be removed by the president only for cause.

“In light of the consistent historical practice under which independent agencies have been headed by multiple commissioners or board members, and in light of the threat to individual liberty posed by a single-Director independent agency … We therefore hold that the CFPB is unconstitutionally structured,” the court ruled.

The ruling allows the CFPB to continue operating, according to the Journal. However, it ordered a restructuring of how the agency operates.

The CFPB said it was reviewing the ruling and declined to comment further, according to the Journal.


  • by Keith | 10/11/2016 1:22:51 PM

    It should be a congressional oversight panel only

  • by Griff | 10/11/2016 1:35:15 PM

    Abolish would be nice. It really is detrimental to many consumers, and puts many small businesses at a disadvantage. We need free markets, this agency makes that nearly impossible.

  • by Joe the Lender | 10/11/2016 1:38:28 PM

    AMEN... Except at the end of the day, you'll just probably get some oversight committee of nut job democrats like Elizabeth Warren and the old Barney Frank, so we'll be just as screwed with asinine industry killing rules and regulations that realistically do nothing for the consumer except make getting a mortgage more expensive and time consuming.


Is TILA-RESPA a good or bad thing long term?