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Supreme Court to rule on CFPB structure
The U.S Supreme Court last week agreed to hear a case, filed by Seila Law, challenging the CFPB's single-director structure. Last month, CFPB Director Kathy Kraninger notified congressional leaders that the bureau would no longer defend its director structure, following years of lawsuits and calls from various stakeholders.
“Regardless of how the Supreme Court rules – NAFCU still believes that a commission structure at the CFPB is absolutely essential to ensuring greater transparency and accountability,” said NAFCU president and CEO Dan Berger following the decision. “A commission would allow for more open debate, diversity of thought, and a stable leadership structure that would better serve consumers in the long-run.
But until Congress acts to implement this change, we will continue to work alongside CFPB Director Kathy Kraninger, who has been open to addressing the needs of credit unions and their 118 million members," added Berger. "More so, as the only financial services trade association to oppose subjecting credit unions to CFPB authority, NAFCU will continue to push for the bureau to exempt credit unions from its rulemakings.”
The CFPB also indicated that it would not defend its position in a filing to the Supreme Court related to the Selia Case. NAFCU is supportive of legislation to reform the bureau's governance structure to a bipartisan commission, as well as other reforms pursued by Congress.
Kraninger reiterated the bureau's stance last week during a House Financial Services hearing saying that the bureau's statutory director-removal provision should be reviewed as it may be unconstitutional.
The case could also have implications on the structure of the Federal Housing Finance Agency (FHFA). The Fifth Circuit, sitting en banc, recently ruled that the FHFA's structure, which is also single director, is unconstitutional. The agency previously decided not to defend its structure; however, changed its position under Director Calabria.
NAFCU will continue to monitor and update credit unions as the case moves through the court.