Banking and Finance Law Daily Speaker Pelosi issues statement on amicus brief in Seila Law v. CFPB
Thursday, January 23, 2020

Speaker Pelosi issues statement on amicus brief in Seila Law v. CFPB

By Nicole D. Prysby, J.D.

Speaker Nancy Pelosi issued a statement supporting the independence of the CFPB, on the same day the U.S. House of Representatives filed an amicus brief urging the U.S. Supreme Court to reject arguments that the Director’s removal protection is unconstitutional.

On Jan. 22, 2020, the U.S. House of Representatives filed an amicus curiae brief in a U.S. Supreme Court case that will decide whether the structure of the Consumer Financial Protection Bureau is constitutional, and Speaker Nancy Pelosi (D-CA) issued a statement in support. The House brief argues that the Court should resolve the case without deciding the constitutionality of the CFPB Director’s removal protection, because the removal protection has no bearing on the issue in the case, which is an action to determine whether a civil investigative demand should be enforced. If the Court does take up the constitutionality question, it should uphold the CFPB Director’s removal protection. Speaker Pelosi’s press release in support of the brief states that the independence of the CFPB is crucial and that the administration’s failure to defend the CFPB is a "direct assault on the financial security of hard-working American families, and an outrageous giveaway to Republicans’ special interest friends and donors." A number of other parties also filed amicus briefs urging the Court to affirm the decision below, in which the Ninth Circuit declined to find that the removal protection is unconstitutional (Seila Law LLC v. Consumer Financial Protection Bureau, Dockt. No. 19-7).

Petitioner Seila Law LLC is a law firm that provides "debt-relief services." The CFPB issued a civil investigative demand (CID) to Seila Law to determine whether it had engaged in unlawful acts or practices in the advertising, marketing, or sale of debt relief services. Seila Law petitioned the CFPB to modify or set aside the CID, on the grounds that "an unconstitutional agency" had issued it, because the Dodd Frank Act’s restriction on the President’s authority to remove the Bureau’s director violates the separation of powers. The CFPB sought to enforce the CID in a federal district court, which was not persuaded that the CFPB is unconstitutionally structured. The Ninth Circuit Court of Appeals affirmed. Seila Law appealed, and the U.S. Department of Justice and the CFPB itself are taking the position that the CFPB’s structure is unconstitutional.

House brief. The U.S. House of Representatives’ amicus curiae brief asserts that the House has a strong interest in defending the validity of the CFPB Director’s removal protection and in the continued existence and effective functioning of the CFPB.

The brief goes on to argue that the Court should avoid getting to the merits of the issue, because a decision on the validity of the CFPB Director’s removal protection would have no effect on the result of this case, an action to enforce a routine CID. Even if Seila Law has standing to raise the issue of removal protection, the Court should hold that the CID would be enforceable even if the removal protection were invalid. The current Director has adopted the view that she is removable at will, and therefore the removal protection has no effect on any of the CFPB’s ongoing activities. If the Court opts to reach the constitutional question, it should uphold the CFPB Director’s removal protection. Congress has routinely exercised its broad authority to structure the Executive Branch by creating independent agencies headed by officers removable only for cause. The Court has repeatedly approved those removal protections, which provide the covered officers with a measure of independence while preserving the President’s authority to remove them if they fail to faithfully execute the laws. The CFPB performs the same regulatory functions independent agencies have long performed, and its Director is subject to the same removal protection the Court has previously approved. Finally, the Court should reject the argument by Seila Law and the Solicitor General that all principal officers must be removable by the President at will.

House Speaker Nancy Pelosi noted that the CFPB protects millions of Americans from predatory financial actors and that the CFPB’s independence is essential, as it must be protected from politically motivated influence over its decisions.

Amicus curiae briefs. A number of other parties filed amicus curiae briefs either supporting the affirmance of the Ninth Circuit’s decision, supporting the brief of the court-ordered amicus curiae, or supporting the CFPB as the respondent.

For instance, amici briefs in support of affirmance include:

Similarly, amici briefs filed in support of the court-appointed amicus curiae include:

  • U.S. Senators from Rhode Island, Connecticut, and Hawaii;
  • Main Street Alliance, a national network of state-based small-business coalitions;
  • Rachel E. Barkow and other scholars focusing on Congress’s structure of the administrative state;
  • The National Consumer Law Center, Center for Consumer Law and Education, Center for Consumer Law and Economic Justice, Housing Clinic of Jerome N. Frank Legal Services Organization at Yale Law School, Consumer Action, and Professor Craig Cowie—consumer organizations, consumer law scholars and clinics, and centers with an interest in the constitutional analysis;
  • Professor John Harrison, University of Virginia School of Law, who teaches constitutional structure and federal courts; and
  • Project on Government Oversight, a nonpartisan government watchdog, and Morton Rosenberg, a former analyst in the American Law Division of the Congressional Research Service.

Meanwhile, Professors Martin S. Lederman and David C. Vladeck, constitutional law professors at Georgetown University Law Center, filed an amicus brief in support of the respondent CFPB.

Companies: Seila Law LLC

MainStory: TopStory CFPB DoddFrankAct EnforcementActions SupremeCtNews

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