July 11, 2018

Trump's Supreme Court nominee previously ruled bureau structure 'unconstitutional'

columnsPresident Donald Trump on Monday nominated Judge Brett Kavanaugh to the Supreme Court. Kavanaugh has served on the U.S. Court of Appeals for the D.C. Circuit since 2006; in 2016, Kavanaugh wrote an opinion for a three-judge panel that found the Bureau of Consumer Financial Protection's (bureau) single-director structure unconstitutional.

In the opinion, Kavanaugh argued that in lieu of a multi-person commission, the bureau's director should at least be supervised and able to be fired at will by the president in order to increase accountability.

Kavanaugh's original opinion was overturned earlier this year by an en banc panel of the D.C. Circuit. However, there continues to be challenges in other courts: the U.S. Court of Appeals for the Fifth Circuit has agreed to hear a challenge to the bureau's constitutionality brought by defendants accused by the bureau in 2016 of engaging in unfair payday lending conduct, and a federal judge in New York also recently ruled the bureau's structure unconstitutional. The Supreme Court could eventually take up the bureau's constitutionality case to settle lower court differences.

NAFCU has long advocated for a commission structure at the bureau to ensure long term continuity and stability in its policymaking. The association is supportive of legislation to reform the bureau's governance structure to a bipartisan commission, as well as other reforms pursued by Congress and Acting Director Mick Mulvaney to reduce credit unions' regulatory burden.

Kavanaugh has published more than 300 opinions and is respected for his ability to build consensus. Kavanaugh will replace retiring Justice Anthony Kennedy if confirmed by the Senate.