Kraninger: CFPB Structure Unconstitutional Posted by AVCU on 10:59 AM

CFPB Director Kathy Kraninger

As reported by CU Times, CFPB Director Kathy Kraninger wrote letters to House and Senate leaders claiming her belief that her own position at the agency is unconstitutional, and asked for a Supreme Court review of the agency’s structure, Kraninger contends that the CFPB’s director should be permitted to be removed by the president for any reason. Under current law, the director may only be removed for cause.

Some time ago, the CFPB issued a civil investigative demand to Selia Law as part of an investigation into whether debt-relief companies were engaging in unlawful acts or practices. The law firm challenged the constitutionality of the section of Dodd-Frank that created the CFPB, saying that the director’s position was unconstitutional. The Obama Administration argued the opposite, but the Trump Administration Justice Department disagreed. The court sided with the bureau at the district and appellate level, but the law firm pursued the case in the Supreme Court. The court has already declined to consider a separate appeal of the director’s position. The CFPB supported the Justice Department's position saying that “a single-headed independent agency presents a greater risk than a multi-member independent commission of taking actions or adopting policies inconsistent with the President’s executive policy."

In her letter to congressional leaders, Kraninger says the bureau’s best interest is to have its constitutionality settled. She added that if the Supreme Court accepts the case, it will appoint an advocate to defend the agency’s current structure.

Consumer groups have sharply criticized Kraninger for the agency’s change of position.