The DOJ filed an amicus curiae brief in response to a February 16, 2017 U.S. Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") Order granting a rehearing en banc in PHH Corporation v. Consumer Financial Protection Bureau ("CFPB"). The Order concerned a D.C. Circuit appellate panel decision that the CFPB's single-member structure was unconstitutional because it conferred excessive power on a single individual not subject to the control of the Executive Branch (see previous coverage). The DOJ argued that under his legal authority to remove executive agency heads at will, President Donald J. Trump also has the authority to remove the CFPB director, since the CFPB is an independent agency with a single director and not a "multi-headed commission."

The DOJ argued that the principle of the Supreme Court's decision in Humphrey's Executor v. United States, which limits a President's power to remove the members of multi-member commissions, should not be extended to the CFPB, which is headed by a single director. In support of this argument, the DOJ noted, inter alia, that restricting a President's power to remove the members of a multi-member commission may be justified as helping to facilitate deliberative group decision-making and promote an inherent institutional continuity, but no such policy rationale applies to a single-headed independent agency like the CFPB. The DOJ also argued that a single-director agency poses a greater risk than does a multi-member independent commission of taking actions or adopting policies that are inconsistent with those of the President.

The DOJ argued that:

  • "the proper remedy for the constitutional violation is to sever the provision limiting the President's authority to remove the CFPB's Director, not to declare the entire agency and its operations unconstitutional";
  • "the Court has discretion to reach the constitutionality of the [CFPB's] for-cause removal provision," and so "it would be appropriate for the Court to provide needed clarity by exercising its discretion to resolve the separation-of-powers issue now"; and
  • "the Court's decision in Lucia [v. SEC], which ruled on the status of agency [administrative law judges], should not affect the disposition of this case."

The amicus brief concluded that, for the reasons stated above, the "for-cause removal should be invalidated and severed from the remainder of the Dodd-Frank Act."

Commentary

From a constitutional standpoint, the CFPB is a very odd agency, subject to the control of neither the President nor Congress.

The fact that a person may (or may not) support the policies of the CFPB should be divorced from the question of whether one supports the manner in which the CFPB operates. If the President cannot remove the head of the CFPB, then what is to prevent this President or future Presidents, assuming that they have majority control of Congress, from establishing other independent agencies that can act outside of the control of successor administrations? For example, let us suppose that President Trump were to reconstitute the EPA along the lines of the CFPB and then appoint a director who could not be removed by any successor President except for misconduct. Are there any supporters of the CFPB who would be equally happy with such a result as applied to the EPA?

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