In the Consumer Financial Protection Bureau’s (CFPB) semiannual report to Congress, CFPB Director Kathleen Kranginger outlined the Bureau’s focus and advancements. According to Kraninger, she is focusing on two areas: “encouraging saving and unleashing innovation wherever appropriate and possible,” with the focus on giving power to consumers when choosing financial products.
“As I have said before, the Bureau cannot be everywhere, with everyone, at every transaction,” Kraninger said in her opening statement. “Therefore, empowering consumers to help themselves, protect their own interests, and choose financial products and services that best fit their needs is essential to preventing consumer harm and building financial well-being.”
During the hearing, House Financial Services Chairwoman Maxine Waters was critical of Kraninger’s stance on the Bureau, as Kraninger herself reversed the Bureau's course and agreed that the "for-cause" removal provision, which states that the president can only remove CFPB's director for "inefficiency, neglect of duty or malfeasance in office," does violate the U.S. Constitution's separation of powers, according to a brief filed earlier this year in the high court by U.S. Solicitor General Noel Francisco and in letters sent to Congress.
“You’ve made it harder for your own agency to crack down on abusive acts by financial institutions,” Waters said. “With this policy statement, you have made it clear that under your watch bad actors will come first and consumers will come last.”
Rep. Patrick McHenry, on the other hand, praised Kraninger’s position on the Bureau’s structure, saying he believes the structure will be found to be unconstitutional and that Congress should be prepared to step in and restructure the agency.
In the case of Seila Law LLC V. Consumer Protection Bureau, Seila Law alleges that the structure of the agency grants too much power to its director. According to court papers, given the CFPB’s broad law enforcement powers, the fact that the president may only remove the director of the CFPB “for inefficiency, neglect of duty, or malfeasance in office” is unconstitutional. In May, the CFPB beat Seila Law before a panel of the 9th U.S. Circuit Court of Appeals.
The U.S. House of Representatives alleging that the case has no bearing on the constitutionality of the Bureau, and as such, the Supreme Court should resolve this case without deciding on the constitutionality of the Bureau.