When the Dodd-Frank Act was negotiated, the CFPB’s structure was written so that the director of the agency could not be fired at will, but instead only for cause. Despite ample precedent for this at other agencies, in Seila Law LLC v. CFPB (2020), the Supreme Court ruled that this violated the separation of powers clause of the Constitution.
Ironically, this example of Republicans and the courts chipping away at the CFPB made it more effective under Biden. If the old rule were in place, Trump’s CFPB director Kathy Kraninger would have been able to serve out her five-year term until . Instead, Kraninger resigned before being fired on Biden’s Inauguration Day, and now progressive Rohit Chopra serves as the director.
Additionally the pay day financing rule, that is at the heart of the case, hasn’t been touched from the the program, regardless if advocates wants to see the element-to-pay standard restored
However, rivals of CFPB haven’t stopped. One other way Congress made an effort to insulate the newest agency’s businesses is with this new thus-called self-funding device. CFPB gets its budget throughout the Government Put aside in place of Congress.
Read moreThis was meant to secure the agency’s concerns regarding switching with administrations
