Both the U.S. District Court for the Central District of California and the U.S. Court of Appeals for the Ninth Circuit rejected Seila Law’s argument and ruled that the CFPB does not violate the Constitution. The law firm appealed the ruling to the U.S. Supreme Court, arguing that the CFPB and Title X of the Dodd Frank Act, which includes provisions that created the bureau and significant consumer protections, are unconstitutional.
In the amicus brief filed with the Supreme Court, the coalition of AGs defended the constitutionality of the CFPB. The coalition argued that CFPB’s structure does not violate the constitution and Congress has the authority to impose for-cause limits on the power of the President to terminate certain officials.
CFPB plays a vital role in protecting consumers
Additionally, the coalition argued that the Dodd Frank Act’s severability clause is clear that Congress intended the CFPB to survive even of certain provisions were found to be invalid. It means, even if the for-cause removal restrictions provision is invalid, the rest of the Title X should remain effective.
