On March 3, the U.S. Supreme Court will hear oral argument in Seila Law LLC v. Consumer Financial Protection Bureau, a case that could have far-reaching implications for businesses regulated, supervised, or examined by the CFPB.  The ultimate adjudication of the constitutionality of the CFPB has been years in the making.  As noted in a blog posting at scotusblog, if the Court agrees that the Dodd-Frank Act’s creation of the Bureau “violate[s] the doctrine known as the separation of powers – the idea that the Constitution divides the different functions of government among the executive, judicial and legislative branches – their ruling could potentially unravel all the CFPB’s decisions in the nine years since its creation.”

Just one member of the Court — the newest member, Associate Justice Brett Kavanaugh — has a record on this case.  “When he was still a judge on the U.S. Court of Appeals for the District of Columbia Circuit, Kavanaugh dissented from a decision by the full court of appeals that rejected a similar challenge to the constitutionality of the CFPB’s leadership structure. Characterizing the director’s authority as ‘power that is massive in scope, concentrated in a single person, and unaccountable to the President,’ Kavanaugh agreed with the challenger that what he described as the CFPB’s ‘novel structure’ violates the Constitution.”

In taking the case, the Court will hear “(1) Whether the vesting of substantial executive authority in the Consumer Financial Protection Bureau, an independent agency led by a single director, violates the separation of powers; and (2) whether, if the Consumer Financial Protection Bureau is found unconstitutional on the basis of the separation of powers, 12 U.S.C. §5491(c)(3) can be severed from the Dodd-Frank Act.”