In a 5-4 decision, the Supreme Court on Monday ruled that the president can fire the head of the Consumer Financial Protection Bureau “at will.” That’s seemingly a victory for the financial industry, which has been locked in a never-ending tug-of-war with the CFPB since it was established in 2010, but the celebration may not last forever, HuffPost reports.
Prior to the ruling, the CFPB director could only be fired for cause, namely “inefficiency, neglect of duty, or malfeasance in office.” The reason behind the distinction is that the post comes with a 5-year term, which means the director could serve under the president of a different party, so the for-cause rule makes it more challenging for a president to terminate the director for partisan, political reasons. But in response to a lawsuit, the court decided the restrictions violate the constitutional authority bestowed upon the executive branch.
In the short-term, the financial industry — which saw the CFPB return $12 billion to defrauded consumers between 2010 and 2016 — is likely on board with the decision, but there’s a catch. The current CFPB Director Kathy Kranninger, who was appointed by President Trump, is considered a defender of the financial sector. If Trump loses to the presumptive Democratic nominee, former Vice President Joe Biden, in November, Biden will now have a lot more leeway to make a change. Tim O’Donnell
The decision is a win for banks in the short-term, but it could backfire on them if Biden wins in November. Trump-appointed CFPB Director Kathy Kranninger has been a defender of the financial industry, and Biden would now have an easy time replacing her with a tough regulator.
— Zach Carter (@zachdcarter) June 29, 2020