The Justice Department argued in a brief filed Friday that President Trump can legally fire the head of the Consumer Financial Protection Bureau (CFPB) as the battle grows over the agency's future.
The U.S. Court of Appeals for the Washington, D.C., circuit ruled in October that the CFPB’s structure is unconstitutional. A court panel held 2-1 that placing a single director in charge of an independent agency of the federal government gives one person too much power.
The panel struck down the provision in the Dodd-Frank Act — which established the CFPB —making the bureau’s director only fireable by the president “for cause” or severe misconduct.
The Justice Department filed a brief on Friday in that case, PHH Corporation v. CFPB, arguing that the president is allowed to fire the CFPB chief. It said that because the CFPB is an independent agency with one director, not a commission with multiple chiefs, Trump has the legal authority to remove its director.
“While we do not agree with all of the reasoning in the panel’s opinion, the United States agrees with the panel’s conclusion that single-headed agencies are meaningfully different,” reads the brief, written by acting Assistant Attorney General Chad Readler and Justice Department appellate division staff.
Republicans have long sought changes to the CFPB’s structure, claiming the agency is too powerful and lacks sufficient congressional oversight. They’ve proposed converting the bureau’s leadership to a bipartisan commission and placing the agency, currently funded out of the Federal Reserve budget, under the congressional appropriations process.
Democrats have fiercely defended the bureau’s governance and power, claiming it's an essential watchdog curbing consumer abuse.