Attorney General Ken Paxton led 11 states in a friend-of-the-court brief filed with the United States Supreme Court, asking it to accept a case challenging the constitutionality of the Consumer Financial Protection Bureau (CFPB).
Created in 2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is an independent federal agency subject to little oversight. Its leadership is not composed of a board or group of commissioners, like most federal agencies, but by a single administrator unaccountable to Congress or the President. The result is that the administrator can unilaterally enforce 19 different federal laws, covering everything from home finance and student loans to credit cards and banking practices. The structure of the CFPB violates the Constitution’s separation of powers, and the ratification of past acts by an acting director who claims to be removable at will does not change the fact that the Constitution prohibits the current structure of the CFPB as a whole.
“The CFPB’s structure allows for an unelected and unaccountable director to effectively wield more power than any official in the U.S. government aside from the President of the United States,” Attorney General Paxton said. “This considerable power being held by a public official who is not held accountable to the President, Congress, or the People is an intolerable violation of our Constitution and a threat to the liberty of every American.”
Texas previously supported a legal challenge to the constitutionality of the CFPB and its Arbitration Rule in October 2017, filing a multi-state amicus brief with the U.S. District Court for the Northern District of Texas. A month later, President Trump and Congress rescinded the Arbitration Rule. Attorney General Paxton also led a coalition of states with several friend-of-the-court briefs supporting the president’s authority to appoint an acting CFPB director, even though the underlying structure of the CFPB is unconstitutional.
Joining Texas in the brief are Arkansas, Indiana, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, Utah, and West Virginia.