The case is similar to Seila Law v. Consumer Financial Protection Bureau where the Supreme Court found the bureau’s single director structure is unconstitutional.
12/7/2020 9:00
In addition to the Dec. 8 Facebook v. Duguid oral argument, the U.S. Supreme Court also set arguments in a case focused on the leadership structure of a federal agency similar to Seila Law v. Consumer Financial Protection Bureau.
The court will hear oral arguments in Collins v. Mnuchin, which challenges the leadership structure of the Federal Housing Finance Agency (FHFA), on Dec. 9.
Plaintiffs in Collins v. Mnuchin asked the Supreme Court to consider the outcome in the case if the FHFA’s structure is ruled to be unconstitutional after the court’s decision in Seila Law.
In Seila Law, the Supreme Court found that the CFPB’s single director structure is unconstitutional, but the provision allowing the removal of the CFPB director only “for cause” is severable from the rest of the statute. As such, the CFPB will continue to exist but its construct will change, and it will be easier to select CFPB leadership based on political affiliation, ACA previously reported.
While the CFPB constitutionality decision is set, of note is that the case was sent back to the 9th Circuit after CFPB Director Kathy Kraninger ratified most regulatory actions the bureau took from Jan. 4, 2012, through June 30, 2020, Bloomberg Law reports. The ratification of previous regulatory actions provides the financial marketplace with certainty that the rules are valid considering the Supreme Court decision in Seila Law.