The CFPB: Here Today, Gone Tomorrow?

Washington, D.C. partners Brian Perryman and Dawn Williams along with D.C. associate Gail Kamal recently spoke to the Association of Corporate Counsel’s National Capital Region, which serves Washington D.C., Virginia and suburban Maryland, to discuss what is likely to be a landmark case for the financial services industry currently before the U.S. Supreme Court. Seila Law v. Consumer Financial Protection Bureau (CFPB) poses the significant question of whether the independent CFPB, led by a single director, violates the constitutional separation of powers. If the Court rules, yes, it will need to answer if the “removal for cause” provision in the Dodd-Frank Act can be severed from the Bureau’s organic statute. The CFPB has already taken the formal position that the provision impermissibly infringes the separation of powers, but argues that the provision can be severed.

The Bureau administers 18 preexisting acts covering most consumer financial products, including mortgages, student loans and credit cards. Bureau-regulated businesses and those in their supply chain may have to rethink their compliance efforts.