In June, the Supreme Court struck down the leadership structure of the CFPB as unconstitutional. (The case is Seila Law LLC v. CFPB, No. 19-7 (June 29, 2020), and the decision is here.) The case resolves a long-simmering question over the CFPB’s viability but the Court’s other holding — that the offending provision limiting the President’s ability to remove the director can simply be severed from the rest of the statute — ensures that the agency will continue to operate.

Going forward, the director of the CFPB is now considered an “at will” appointee, meaning the President can remove her at any time, for any reason. The current director, Kathy Kraninger, has said all along that she considers herself to serve at the pleasure of the President, suggesting that the Supreme Court’s decision will have little practical impact. Nonetheless, important questions remain over whether actions taken by the Bureau prior the Supreme Court’s decision are still valid. Since the decision, Director Kraninger issued a statement purporting to “ratify” some of the Bureau’s prior rulemaking. Whether that will be enough to insulate the Bureau from further legal challenges remains to be seen.

Originally published in Non-Prime Times, the official publication of NAF Association, on July 27, 2020.