CUNA Asks Supreme Court to Void CFPB Structure

CUNA on Monday asked the U.S. Supreme Court to rule that the CFPB’s structure is unconstitutional.

The trade group filed an amicus brief in a case the court agreed to consider questioning whether the single-director structure of the agency violates the Constitution since the director may only be removed for cause.

Seila Law, a law firm filed suit challenging the structure and the Supreme Court has agreed to hear the case, with oral arguments scheduled on March 3.

Under President Obama, the agency defended its current structure, but current CFPB Director Kathy Kraninger has joined the Trump Administration in saying that the agency is illegally constituted.

As a result, the court has asked former Solicitor General Paul Clement to present an argument defending the agency.

CUNA was one of several groups filing amicus briefs on the case.

In its brief, CUNA asked the court to void the agency’s structure and then issue a stay of its order to allow Congress to enact legislation to create a commission to run the agency.

“The Bureau clearly wields vast power to regulate financial and consumer-protection laws,” CUNA said. “But the most troubling aspect is the unchecked nature of that power.”

The trade group said that the single-director makeup of the agency exposes the agency and consumers to variances in ideology from one administration to another.

In addition, CUNA said, financial institutions have made major investments or abandoned markets based on the CFPB’s rulemaking “only to have their business decisions undermined by the Director’s political whims.”

“This has been an issue that CUNA, the [credit union] leagues and credit unions have been engaged in for more than a decade,” CUNA Chief Advocacy Officer Ryan Donovan said. “There’s no meaningful oversight by Congress and there’s no meaningful oversight by the Executive Branch.”