Kraninger of CFPB agrees: his job security is unconstitutional

Kathy Kraninger, director of the Consumer Financial Protection Bureau, further backed Tuesday the Trump administration 's stance that the agency it runs exceeds constitutional limits.

Ms. Kraninger told Congressional leaders and the CFPB staff that she supported a judicial effort to urge the Supreme Court to rule on challenges to her own power. Many cases in the court system argue that the limitations on the ability of a sitting president to dismiss a CFPB director are unconstitutional.

Until now, the courts have supported the provision in the law that a CFPB official can be dismissed only "for a reason", and not just at the discretion of the president. But Republicans have argued for years that this provision gave undue power to a CFPB leader, who was not a board or commission.

Kraninger, appointed by Trump, sent letters to House Majority Leader Mitch McConnell and House Leader Nancy Pelosi on Tuesday, saying the CFPB is joining the Justice Department in support of the House of Commons. Supreme Court Review of a pending case before the 9th^th Court of Appeal of the American circuit.

"I decided that the Bureau should adopt the opinion of the Department of Justice that the removal for cause provision is unconstitutional," wrote Kraninger. "A Supreme Court decision that the impeachment provision is unconstitutional should not affect the Bureau's ability to perform its important task."

A court of appeal declared constitutional the management structure of the sole director of the CFPB in January 2018. This means that the president can dismiss a director of the CFPB only for "inefficiency, negligence in duty or malpractice in power."

Kraninger indicated separately in an email to the staff that she did not generally comment on the ongoing dispute, but wished to explain her position. Its position is somewhat unusual in that, if the Supreme Court repealed the provision for cause, its probability of dismissal would increase if a Democrat won the presidential race of 2020.

But she told the staff that a final decision on the management structure of the agency would benefit the work of the CFPB.

"By settling this constitutional issue, we will be able to ensure that we are even better equipped to accomplish the mission, and I hope this clarity," she wrote.

Questions about the constitutionality of the CFPB prevented the agency from settling in 2011 and were used to slow down the prosecution of dishonest businesses.

"Since the Bureau's inception, many have used the uncertainty surrounding the constitutionality of this provision to challenge legal actions brought by the Bureau as part of our mission," wrote Kraninger to staff. "Litigation on this issue has resulted in significant delays in some of our enforcement and regulatory actions. I think this dynamic will not change until the constitutional question is resolved either by the Congress or by the Supreme Court. "

Kraninger said that the agency was now supporting the Supreme Court's review of the CFPB v. Seila Law, a case involving a California firm that the bureau tried to investigate in 2017. According to Kraninger, this case "raises the question of whether the [for-cause removal] This provision unconstitutionally limits the executive authority of the President under Article II.