Michigan Attorney General Dana Nessel has joined 23 other attorneys general in filing an amicus brief to save a key consumer protection agency.
They argue that the U.S Supreme Court should preserve consumer protections provided under Title X of the 2010 federal Dodd-Frank Act, which includes the Consumer Financial Protection Bureau (CFPB) and other tools states use to combat fraud and abusive practices.
“The Consumer Financial Protection Bureau was specifically designed to provide consumers with information to make sound financial decisions,” said Nessel. “My colleagues and I cannot sit idly by when there is a threat against essential consumer protections.”
The AGs argue that the case would “gut” Title X. They highlight how the states have worked cooperatively with the CFPB to root out fraud and abusive consumer practices in the market, including joint enforcement actions and information sharing.
In 2017, the CFPB began an investigation into the California law firm Seila Law for its debt-relief practices. Seila Law attempted to block the investigation, arguing that the CFPB is unconstitutionally structured because the director may only be terminated by the president for insufficient office conduct. According to Seila Law, this removal provision infringes on the president’s executive power and violates the Constitution’s separation of powers clause.
The U.S. District Court for the Central District of California and the U.S. Court of Appeals for the Ninth Circuit both rejected Seila Law’s arguments and upheld the constitutionality of the CFPB. Seila Law has now appealed to the U.S. Supreme Court, again arguing that the CFPB is unconstitutional and that all of Title X of the Dodd-Frank Act must be struck down.
Under the President Trump administration, the CFPB has changed its position and now agrees with Seila Law that the removal provision violates the separation of powers clause, although the agency argues that the rest of Title X can survive even if the provision is invalid.
In their brief, the attorneys general argue that the CFPB’s structure is constitutional and that — even if the removal provision is invalid — the CFPB and the rest of Title X should survive.
Other states involved are: California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and Wisconsin.