The U.S. Supreme Court on Monday turned away a Texas bank`s constitutional challenge to the structure of the U.S. Consumer Financial Protection Bureau, passing up a case that could have led to more presidential power over an independent agency that President Donald Trump`s administration already has weakened.
The decision by the justices not to hear an appeal by State National Bank of Big Spring may not be the final word on the matter as three other cases involving the CFPB are heading toward the high court.
At issue was whether the CFPB`s sole director possesses too much power in violation of the authority the U.S. Constitution gives a president to appoint and remove certain federal officials. A ruling in favor of the bank could have allowed a president to fire the agency`s director for any reason.
The CFPB, a consumer watchdog agency often criticized by conservatives and Trump`s fellow Republicans, was established in 2011 under legislation signed by former President Barack Obama that was passed by a Congress controlled by Obama`s fellow Democrats to crack down on predatory financial practices after the 2007-2009 financial crisis.
"The case raises constitutional issues of major importance regarding the Consumer Financial Protection Bureau, an agency that wields massive power over the economic activities of the public and sets a dangerous precedent for unaccountable federal bureaucracy," said Sam Kazman of the Competitive Enterprise Institute, a conservative group involved in the challenge.
Democrats have said the agency plays a critical role in protecting consumers.
The Texas bank`s challenge was delayed in reaching the justices because it was put on hold while the U.S. Court of Appeals for the District of Columbia Circuit dealt with a case involving mortgage servicer PHH Corp that had raised the same issues.
Only eight of the nine justices on the court, which has a 5-4 conservative majority, participated in the decision to hear the case. Trump`s appointee Brett Kavanaugh recused himself, most likely because he took part in an earlier ruling in the case before joining the high court last October.
The agency was set up under the 2010 Dodd-Frank Wall Street reform law. Since then, there have been efforts by Republicans and the financial industry to undercut its authority, driven by concerns about its powers over a wide array of financial products and its structure.
The Trump administration has shelved several rules and aggressively curtailed the agency`s enforcement.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.