The U.S. Supreme Court agreed on Friday to decide the constitutionality of the single-director structure of the Consumer Financial Protection Bureau, an agency long criticized by the business community and Republican leaders on Capitol Hill, Law.com reported. The challenge to the independent federal agency created by Congress in the 2010 Dodd-Frank Wall Street reform law was brought by California-based Seila Law, which provides legal services to consumers, including assistance with the resolution of consumer debt. Seila Law is represented by Kannon Shanmugam, a partner at Paul, Weiss, Rifkind, Wharton & Garrison. The CFPB issued a civil investigative demand seeking information and documents from the law firm in an investigation into whether it violated certain federal laws. Seila objected to the demand, claiming that the agency was unconstitutionally structured. The CFPB petitioned a federal district court for enforcement, which was granted. The U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s ruling that the agency’s structure did not violate the separation of powers. In his petition, Shanmugam argued that the CFPB director alone decides what rules to issue, how to enforce the law and what penalties to impose on those who violate the law.
