The House Financial Services Oversight and Investigations Subcommittee will hold a hearing to examine whether the structure of the Bureau of Consumer Financial Protection violates the Constitution. The hearing, at 10 a.m. (EST) on March 21, will also focus on “structural changes to the Bureau to resolve any constitutional infirmities,” according to a news release from the subcommittee, led by Chairman U.S. Rep. Ann Wagner (R-Mo.)
Witnesses set to testify during the hearing include:
- The Hon. Ted Olson, Partner, Gibson, Dunn & Crutcher LLP, former Solicitor General of the United States;
- Saikrishna Prakash, James Monroe Distinguished Professor, University of Virginia School of Law;
- Adam White, Research Fellow, Hoover Institution; and
- Brianne Gorod, Chief Counsel, Constitution Accountability Center.
In January, the House Financial Services Committee agreed to, by a voice vote, its Authorization and Oversight Plan for the 115th Congress after a hearing Feb. 7. The plan includes oversight of the Dodd-Frank Wall Street Reform and Consumer Protection Act and states the committee will “continue its close examination of the implementation of the [Dodd-Frank Act] by the financial regulators charged with implementing the law.”
The committee’s approval of the oversight plan including a continuous review of the Dodd-Frank Act occurred after President Trump issued executive orders for review of the law, ACA reported.
The plan also outlines the committee’s oversight of the CFPB, including its regulatory, supervisory, enforcement and other activities and the effect of those activities on regulated entities and consumers, ACA International previously reported.
Attention to the CFPB’s authority and the leadership structure has increased since President Donald Trump took office and legislation proposed to change the structure and CFPB oversight continues in the 115th Congress.
The CFPB’s leadership structure is also challenged in the PHH Corp., et al. v. Consumer Financial Protection Bureau lawsuit in the U.S. Court of Appeals for the D.C. Circuit.
On Oct. 16, 2016, the D.C. Circuit held that in light of the Supreme Court’s separation of powers precedents, the CFPB is unconstitutionally structured because it is headed by a single director who can be removed by the President only for cause rather than at will, ACA previously reported. The court then severed the unconstitutional for-cause removal provision from the rest of the Dodd-Frank Act, making it clear that going forward the director is removable by the President at will.
The CFPB is currently appealing the ruling.
This month, ACA International filed an amicus brief in the ongoing lawsuit between PHH and the CFPB over whether its governance structure is unaccountable and has exceeded its authority.
ACA International will monitor Tuesday’s subcommittee hearing.
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