Executive Power and the CFPB

The U.S. Constitution places the “executive power” in the hands of the President and makes the President responsible for ensuring “that the laws be faithfully executed.” But can the President meaningfully supervise an agency whose head he cannot fire, except for specified reasons? In a recent decision, the U.S. Court of Appeals for the District of Columbia Circuit considered that question as it relates to the Consumer Financial Protection Bureau (CFPB), an agency created by Congress in the wake of the 2008 financial crisis to “promote stability and confidence in the country’s financial system.” Specifically, the court considered the constitutionality of Congress’s decision—in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which created the CFPB—to insulate the CFPB director from presidential influence by allowing removal only in cases of “inefficiency, neglect of duty, or…

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