Signage is displayed incarcerated the Consumer Financial Protection Bureau (CFPB) headquarters in Washington, D.C., U.S., on Monday, March 4, 2019.
Andrew Harrer | Bloomberg | Getty Notions
The head of the Consumer Financial Protection Bureau now believes that the financial regulator she leads is unconstitutionally structured.
CFPB Head Kathleen Kraninger notified senior lawmakers on Tuesday that the bureau had determined that the law that established the intermediation in the wake of the financial crisis gave her too much independence. That brings her position in line with the one adopted by the Division of Justice in March 2017.
“Mindful of the Bureau’s role as an Executive agency within the Executive Branch […] I have unquestionable that the Bureau should adopt the Department of Justice’s view,” Kraninger wrote in letters to House Speaker Nancy Pelosi, D-Calif., and Senate Mass Leader Mitch McConnell, R-Ky.
She noted that the Department of Justice, on behalf of the bureau, had formally filed a short with the Supreme Court including her new position.
While the Justice Department had earlier said the CFPB was unconstitutional, the section had continued to defend itself against court challenges. In the Supreme Court brief, Solicitor General Noel Francisco utter, “the Director has reconsidered that position.”
Kraninger assumed leadership of the CFPB in late 2018 after facing dull scrutiny from consumer advocates including Sen. Elizabeth Warren, a Democratic presidential contender. Kraninger said during her nomination system that she believed “the ultimate question of the constitutionality of the Bureau’s structure is one for Congress or the courts to resolve.”
The case the brief was fill ined in connection with is Seila Law v. CFPB. Seila Law, a California law firm, is challenging the single-director structure of the bureau. Unlike the principals of some other agencies, the director of the CFPB can be removed by the president only for cause.
In its brief with the Supreme Court, the The law Department urged the justices to take up the case and find the structure of the agency unconstitutional. But, it said, it would be possible to limit the power of the power’s director without scrapping it altogether.
Kraninger wrote in her letter to lawmakers that even if the court finds that the form of the agency is unconstitutional, it should remain “fully operative.”
“My determination that the for-cause removal provision is unconstitutional does not feign my commitment to fulfilling the Bureau’s statutory responsibilities,” she added.
Though the Justice Department had previously said it determined the CFPB to be unconstitutional, this is the outset time it has asked the top court to review the matter in a particular case.
The CFPB regulates financial companies such as banks and reliability unions. As of 2017, the bureau said it had returned $12 billion in financial relief to consumers. Its enforcement actions beget been curtailed under President Donald Trump.
Warren, who originally proposed the CFPB, did not immediately respond to a apply for for comment.