Obama and Elizabeth Warren just won a major legal battle against Trump

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The Court of Appeals for the District of Columbia has just ruled that the structure of the Consumer Financial Protection Bureau, originally established by Elizabeth Warren in the Obama Administration, is constitutional and that it is permissible to ban the president from firing its director at will.

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“Congress’s decision to provide the CFPB director a degree of insulation reflects its permissible judgment that civil regulation of consumer financial protection should be kept one step removed from political winds and presidential will,” the court wrote in its opinion.

President Trump exercized his presidential will last November when he ousted Leandra English, the acting head of the agency picked by the outgoing director Richard Cordray, to install his own designated acting head, Office of Management and Budget Director Mick Mulvaney, into the position in an attempt to rollback the consumer protections against predatory financial practices that the agency had been aggressively implementing.

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Mulvaney has since put the brakes on the CFPB’s activities, most notable by refusing to request funding from the Federal Reserve for the Bureau for the second quarter of 2018, according to Politico.

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While the court’s decision should settle the issue of the bureau’s independence, it does not immediately affect the outcome of Trump’s decision to overrule the CFPB’s succession planning and install his own pick as Acting Director of the agency. While the court fight over that debacle will continue, the precedent established in this case, which was filed as part of a suit by a target of the CFPB’s enforcement actions, should be a good basis for the decision in Leandra English’s suit in front of the same court against the installation of Mulvaney in her stead.

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The ruling in English’s case is crucial at this point, since if President Trump is allowed to choose a full-time replacement for Mulvaney as permanent director of the bureau, today’s court decision would ensure that the replacement director would get to serve a full five year term not matter who replaces Trump once he is impeached or leaves office at the end of his term.

Deepak Gupta, the attorney representing the CFPB in the case, is also representing English in her appeal of the court decision that allowed Mulvaney to replace her. he praised the court victory today, saying:

“This is a resounding victory for the Consumer Financial Protection Bureau and for independent agencies generally. It would’ve been a devastating loss to the very concept of independent agencies that have existed since the New Deal” had the bureau lost the case.”

Stay tuned for further developments in the weeks ahead to see whether consumers or predatory financial institutions score the ultimate win.

Vinnie Longobardo

Vinnie Longobardo is a 35-year veteran of the TV, mobile, & internet industries, specializing in start-ups and the international media business. His passions are politics, music, and art.

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