If there was a rock concert for financial services case law, Tuesday’s oral arguments before the Supreme Court in Seila Law v. CFPB might just have been it.
In the courtroom to hear arguments on the constitutionality of the nearly 9-year-old federal agency were two of its former directors – Richard Cordray and Mick Mulvaney. The House of Representatives argued for the bureau’s side in the case, and Republican Financial Services Committee member Rep. Andy Barr was in the crowd, as was former Sen. Chris Dodd, for whom the Dodd-Frank Act partially is named.
Trade association executives, compliance attorneys and more filled the courtroom, with some waiting 90 minutes and more on a cool rainy day in Washington DC, still unable to get in.
Inside, Seila Law attorney Kannon Shanmugam reiterated arguments the company has made in cases before, that the bureau structure is unconstitutional, but that the Supreme Court did not need to decide a remedy, but simply to invalidate the civil investigative demand it has been challenging in the courts.
Under questioning from Justices Ruth Bader Ginsburg and Sonia Sotomayor, Shanmugam disputed the for-cause protection as a “very modest restraint,” as Ginsburg put it, and said that even if the court found the for-cause protection severable from the rest of the Dodd-Frank Act, that the remedy would not make Seila Law whole in its challenge.
Attorney Paul Clement, appointed by the court to defend the CFPB since the Department of Justice argued that it was unconstitutional, told the court that the sides were in “violent agreement” that the for-cause provision is unconstitutional.
But because there was not a dispute between the president and the current CFPB director, he argued the court did not need to decide the constitutionality of the clause or the bureau – an argument that drew some sharp comments from Justice Neil Gorsuch.
As industry experts began to digest the path of the questioning by the justices, there was no consensus on the path forward as the court will discuss the briefs and arguments and work toward a ruling, expected later this summer.
“Maybe this wasn’t the best case to bring to the Supreme Court,” RESPRO Executive Director Ken Trepeta told RESPA News.
“Congress should take this opportunity to rectify the problem by creating a bipartisan commission,” Consumer Bankers Association President and CEO Richard Hunt, the former National Settlement Services Summit speaker who was in attendance Tuesday morning, said in a statement.
For the full stories from RESPA News’ live on-site coverage, subscribers can find them here:
Our subscriber-exclusive story detailing the arguments and questioning by justices is available by clicking here: Court peppers sides in CFPB case
Our subscriber-exclusive story detailing on-site reaction from industry experts on the oral arguments is available by clicking here: Industry reacts to CFPB constitutionality case