Washington, DC – Today, U.S. Senators Sheldon Whitehouse (D-RI), Richard Blumenthal (D-CT), and Mazie Hirono (D-HI) submitted a friend-of-the-court brief in a major Supreme Court challenge to the constitutionality of the Consumer Financial Protection Bureau (CFPB). The senators highlight the damage that unbridled corporate power can do to Americans’ health, safety, and welfare, and document the sweeping campaign by corporate interests to capture and control regulatory agencies – and now the courts themselves – for their own benefit. The senators urge the Court to uphold the CFPB and the prerogatives of Congress to guard against special-interest attacks on the basic functions of federal agencies – agencies that are essential to a well-functioning government.
“[T]he creation of the CFPB came about in the wake of one of the worst financial crises in the nation’s history. While Americans lost their homes in a massive foreclosure crisis, they saw Wall Street forces responsible for the crisis face no accountability. Concern in the public and in Congress over the demonstrated force of industry influence was widespread and justified,” the senators write. “This Court should not . . . invalidate this critical agency, subjecting those defended by its proven expertise and track record to the whims of a malleable Congress. To do so would certainly be a ‘win’ for big, regulated industries flush with cash and cadres of paid lobbyists. But for the public, it would be a devastating disservice.”
In response to the 2008 financial crisis, Congress created the CFPB to protect Americans from predatory and harmful practices of the financial services industry. Congress determined that two attributes would help the CFPB fulfill this mission most effectively: the ability to act promptly and decisively in response to new threats to consumers, and a degree of independence from private influence and political interference. Those goals counseled in favor of an agency led by a single director, and allowing the president to remove this director only for “inefficiency, neglect of duty, or malfeasance in office.”
As the senators note in their brief, the case before the Court, Seila Law v. CFPB, is the centerpiece of a decades-long, industry-driven political project to dismantle the critical public welfare and safety protections of the so-called “administrative state.” In seeking to declare the CFPB unconstitutional, Seila Law and the Trump administration advance a sweeping view of the “unitary executive”—a contrived and ahistorical constitutional theory that would hand control over virtually every agency action to the president, and which threatens to undo nearly a century of well-settled constitutional and administrative law.
The senators chronicle in their brief the deep roots of the corporate influence campaign to press the courts to adopt this so-called unitary executive theory. First developed to give legal cover to the Reagan Revolution’s pro-corporate deregulatory agenda, the unitary executive theory has been roundly rejected by the Supreme Court, most notably in an 8-1 majority opinion by Justice Rehnquist in the 1988 case Morrison v. Olson. But, as the senators document, in the decades since that defeat, regulated interests have mobilized their resources to advance their pet unitary executive theory and see Morrison overturned.
Today, the influence campaign is orchestrated by the dark money-funded and highly influential Federalist Society. Funded by powerful antiregulatory forces like the U.S. Chamber of Commerce and the Kochs, plus untold millions in anonymous donations, the Federalist Society and its network have long prioritized the mainstreaming of the unitary executive theory. The senators note that the Federalist Society has coordinated a sweeping effort to pack federal courts with judges that support its antiregulatory agenda; the Federalist Society now counts 85 percent of the Trump administration’s Supreme Court and circuit court nominees as members. One of them, Brett Kavanaugh, promised in 2016 to “put the final nail in the coffin” of Morrison should he be given the chance.
As the senators note, Federalist Society funders are also behind an eye-opening “astroturf” campaign of commonly funded amicus briefs—at least 13 amicus filers supporting the petitioner in Seila Law receive financial support from the same entities that back the Federalist Society’s efforts to bring the unitary executive theory into the legal mainstream.
A PDF copy of the senators’ brief is available here.