On December 16, 2019, BG&A and its co-counsel O’Melveny & Myers filed an amicus brief in Seila Law v. Consumer Financial Protection Bureau (CFPB) (S. Ct. No. 19-7), on behalf of the State National Bank of Big Spring Texas, the Competitive Enterprise Institute (CEI), and the 60 Plus Association.
BG&A, led by Founding Partner C. Boyden Gray, together with O’Melveny and CEI, brought the first challenge to the CFPB’s constitutional structure in 2012, in the case of State National Bank of Big Spring v. Texas. Several similar suits were filed across the country, and the Supreme Court will finally review the CFPB’s constitutionality in Seila Law v. CFPB.
The CFPB is an independent agency created by the 2010 Dodd-Frank Act. It is led by a single Director who may not be removed except for cause, and it is funded through direct payments from the Federal Reserve, outside of the congressional appropriations process.
BG&A’s amicus brief argues that the CFPB Director’s protection from removal by the President, coupled with its lack of accountability to Congress’s power of the purse, violates the separation of powers. The brief also argues that if the Court were to “sever” the CFPB Director’s removal protection from the statute would make matters worse: It would place a fully self-funded law-enforcement agency under presidential control–something not even Congress has done.
Alison Frankel of Reuters, highlighted BG&A’s brief for CEI as one of the “two most interesting briefs” of the twenty-three filed in the case:
If the Supreme Court were to attempt to fix the CFPB’s allegedly unconstitutional structure by severing the provision shielding the director from accountability to the president, the CEI brief said, it would actually create even more of a separation-of-powers mess. The president would thus effectively control a self-funded law-enforcement agency whose budget doesn’t have to be approved by Congress. “That novel entity,” the brief said, “would aggrandize the president at Congress’ expense, and it would raise difficult questions about the compatibility of the CFPB’s funding mechanism with the Appropriations Clause.”
BG&A’s amicus brief is available here.