On January 31, 2018, the full panel for the United States Court of Appeals for the District of Columbia Circuit upheld as constitutional the structure for the appointment of a Director of the Consumer Financial Protection Bureau (“CFPB”) – reversing the Court’s prior October 2016 decision to the contrary.
The CFPB was created in 2010, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Congress provided that the President would appoint a single director, to be confirmed by the Senate, to serve a five-year term – with the potential to hold over, pending the confirmation of a successor Director. The D.C. Circuit found that there was “nothing constitutionally suspect” regarding the leadership structure of the CFPB, and that the Director was protected by the for-cause removal standard of “inefficiency, neglect of duty, or malfeasance in office.”