Defenders argued the rules ensured the watchdog agency's independence, keeping it insulated from politics with a leader not directly answerable to the White House. But Roberts writes the director 'must be removable by the president at will.'
In a 5-4 opinion authored by Chief Justice John Roberts, the court struck down part of the law that established a CFPB director who could only be fired for “inefficiency, neglect of duty or malfeasance in office.”
Roberts was joined by the court’s four other conservatives in striking down the rules, but the court was more fractured on whether it means the entire agency has to go. Justices Samuel Alito andjoined Roberts and the liberal justices in concluding the restrictions involving the director could be severed.
The CFPB was created by Congress after the 2008 financial crisis to strengthen oversight and protect consumers. All Americans who have credit cards, home mortgages or investments with major U.S. financial institutions have a stake in the CFPB and its regulation of Wall Street.
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