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Attorney General Jason R. Ravnsborg

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AG Jackley Joins Challenge to the Consumer Finance Protection Bureau’s Structure

PIERRE, S.D. – Attorney General Marty Jackley has joined an amicus brief filed in the United States Court of Appeals for the District of Columbia by 15 Attorneys General. The brief challenges the constitutionality of a restriction on the President’s power to remove the director of the Consumer Finance Protection Bureau (CFPB).

“The State Attorneys General protect consumers and businesses through consumer protection divisions. Duplicating services with a federal agency that has been given an open checkbook and apparently answers to no one makes little sense,” stated Jackley. “We hope that the Courts continue to determine that the CFPB exists in clear violation of the Constitution and poses a direct threat on state interests.”

The brief was filed in the case of PHH Corporation v. Consumer Financial Protection Bureau. A three judge panel of the Court of Appeals, held that the statutory restriction on the President’s removal power violated Article II of the Constitution. The panel held that, unlike multi-member independent agencies, an independent agency under the control of a single director constitutes a violation of the separation of powers. The panel decision was vacated and the D.C. Circuit granted en banc consideration of the issue.

The brief argues the CFPB’s novel governance structure violates the separation of powers in a manner that poses a direct threat on states interests. The CFPB’s novel governance structure vests control of the agency in a single director who is not accountable to any elected official. As a result, CFPB’s action is not constrained by the “political safeguards of federalism,” which the Supreme Court has treated as an essential mechanism for preserving the role of the States within the federal system.