Recently the Supreme Court of the United States (SCOTUS) ruled on a case that had to do with the regulations and rules governing the Consumer Financial Protection Bureau (CFPB). For background, the CFPB was introduced in 2008 financial industry regulation package with the goal to specifically “protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law.” One of their biggest goals was to help regulate the financial services sector that deals with short term lending.
This case Seila Law v CFPB decided that the head of the CFPB does in fact, fall under Presidential authority when it comes to removability. Part of the petitioners at Seila Law complaint was that they don’t have to follow guidelines and requests from the CFPB because their structure was unconstitutional therefore the entire agency and regulatory structure should be struck down.
Writing for a 5-4 majority, Chief Justice John Roberts ruled that the CFPB structure—“an independent agency that wields significant executive power and is run by a single individual who cannot be removed by the President unless certain statutory criteria are met”—violates the Constitution’s separation of powers
However in a 7-2 Supreme Court ruling, they found that even though they found ( in a previous 5-4 ruling) that the organizational structure was unconstitutional that could be severed from the law and allow the body to remain and have the same statutory authority it previously held.
So what does this mean for LDF Holdings and for our customers? It’s an interesting case to examine but at the end of the day the CFPB has already introduced a lot of best practices and guidelines that we follow and that we’ll continue to follow no matter what their leadership structure is. It’s great to know that we are on the same page as the people whose job it is to protect customers in the financial marketplace. We’ll continue to follow their guidelines and even if future cases nullify this agency or other federal legalese, we’re still going to keep our customer’s satisfaction at the top of our priority list, no matter what.