Seila Law LLC v. Consumer Financial Protection Bureau

Supreme Court of the United States · 2020 · Administrative Law

Reporter Citation Pending

Updated August 1, 2026

Administrative Lawsingle-director removalseparation of powersArticle IIexecutive powerpresidential removalCFPBindependent agency

Facts

Congress created the CFPB as an independent financial regulator headed by a single Director appointed by the President with Senate consent for a five-year term and removable by the President only for inefficiency, neglect of duty, or malfeasance in office. The CFPB possesses broad rulemaking, enforcement, and adjudicatory authority over consumer-finance laws and receives funding outside the annual appropriations process. In 2017, the CFPB served Seila Law, a debt-relief law firm, with a civil investigative demand seeking information and documents about its business practices. Seila Law objected that the CFPB's single-Director leadership insulated from at-will presidential removal violated the separation of powers.

Issue

Whether Congress may create an independent agency led by a single Director, vested with significant executive power, and removable by the President only for inefficiency, neglect of duty, or malfeasance in office. If not, whether the removal restriction is severable from the rest of the Dodd-Frank provisions creating and empowering the CFPB.

Rule

The President generally has authority under Article II to supervise and remove executive officers who exercise executive power on the President's behalf. The Court recognized only two existing exceptions to unrestricted presidential removal: for-cause protection for multimember expert agencies not wielding substantial executive power, and for-cause protection for inferior officers with limited duties and no policymaking or administrative authority. The Court declined to extend those exceptions to an independent agency led by a single Director who wields significant executive power. When a removal restriction is unconstitutional, it is severed if the remainder of the statute can function independently and Congress would not have preferred no agency at all.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Congress creates the National Digital Lending Authority, based in Denver, to regulate online consumer lending nationwide. The agency is headed by one Senate-confirmed Director serving a six-year term, removable by the President only for inefficiency, neglect of duty, or malfeasance in office, and the Director may issue binding regulations, bring civil enforcement actions, and impose penalties through administrative proceedings.

If a regulated lender challenges the Director’s tenure protection, how should a court rule under the majority’s approach?

Explanation. The majority held that Article II generally gives the President authority to supervise and remove officers exercising executive power on the President’s behalf. It refused to extend prior exceptions to an independent agency led by a single Director who alone wields substantial rulemaking, enforcement, and adjudicatory authority. Senate confirmation does not cure that defect, and civil enforcement still counts as quintessential executive power. (Derived from Seila Law LLC v. Consumer Financial Protection Bureau (n.d.).)