Seila Law LLC v. Consumer Financial Protection Bureau

140 S.Ct. 2183 (2020)


Congress established the Consumer Financial Protection Bureau (CFPB) as an independent regulatory agency tasked with ensuring that consumer debt products are safe and transparent. Congress provided that the CFPB would be led by a single Director, who serves for a longer-term than the President and cannot be removed by the President except for inefficiency, neglect, or malfeasance. The CFPB Director is appointed by the President with the advice and consent of the Senate. The CFPB receives funding directly from the Federal Reserve, which is itself funded outside the appropriations process through bank assessments. The CFPB’s annual budget has exceeded half a billion dollars. The CFPB Director has no boss, peers, or voters to report to. Yet the Director wields vast rulemaking, enforcement, and adjudicatory authority over a significant portion of the U. S. economy. Congress transferred the administration of 18 existing federal statutes to the CFPB, including the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, and the Truth in Lending Act. See §§5512(a), 5481(12), (14). Congress enacted a new prohibition on “any unfair, deceptive, or abusive act or practice” by certain participants in the consumer-finance sector. §5536(a)(1)(B). The CFPB has the authority to conduct investigations, issue subpoenas and civil investigative demands, initiate administrative adjudications, and prosecute civil actions in federal court. The CFPB may seek restitution, disgorgement, and injunctive relief, as well as civil penalties of up to $1,000,000 (inflation-adjusted) for each day that a violation occurs. From its inception, the CFPB has obtained over $11 billion in relief for over 25 million consumers, including a $1 billion penalty against a single bank in 2018. The agency may conduct administrative proceedings to “ensure or enforce compliance with” the statutes and regulations it administers. D is a California-based law firm that provides debt-related legal services to clients. The CFPB issued a civil investigative demand to D to determine whether the firm had “engaged in unlawful acts or practices in the advertising, marketing, or sale of debt relief services.” D objected in that the agency’s leadership by a single Director removable only for cause violated the separation of powers. The CFPB filed a petition to enforce the demand in the District Court. D renewed its defense that the demand was invalid and must be set aside because the CFPB’s structure violated the Constitution. The Court ruled for CFPB and D appealed. The appeals court affirmed. The Supreme Court granted certiorari.