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U.S. Supreme Court rejects challenge to consumer protection bureau

Reuters  |  WASHINGTON 

By Hurley

WASHINGTON (Reuters) - The on Monday turned away a bank's constitutional challenge to the structure of the U.S. Consumer Financial Protection Bureau, passing up a case that could have led to more presidential power over an independent agency that already has weakened.

The decision by the justices not to hear an appeal by of Big Spring may not be the final word on the matter as three other cases involving the CFPB are heading toward the high court.

At issue was whether the CFPB's sole possesses too much power in violation of the authority the U.S. Constitution gives a to appoint and remove certain federal officials. A ruling in favor of the could have allowed a to fire the agency's for any reason.

The CFPB, a consumer watchdog agency often criticized by conservatives and Trump's fellow Republicans, was established in 2011 under legislation signed by former President that was passed by a controlled by Obama's fellow Democrats to crack down on predatory financial practices after the 2007-2009 financial crisis.

"The case raises constitutional issues of major importance regarding the Consumer Financial Protection Bureau, an agency that wields massive power over the economic activities of the public and sets a dangerous precedent for unaccountable federal bureaucracy," said of the Competitive Enterprise Institute, a conservative group involved in the challenge.

Democrats have said the agency plays a critical role in protecting consumers.

The bank's challenge was delayed in reaching the justices because it was put on hold while the dealt with a case involving mortgage servicer that had raised the same issues.

Only eight of the nine justices on the court, which has a 5-4 conservative majority, participated in the decision to hear the case. Trump's appointee recused himself, most likely because he took part in an earlier ruling in the case before joining the high court last October.

The agency was set up under the 2010 Dodd-Frank Wall Street Since then, there have been efforts by Republicans and the financial industry to undercut its authority, driven by concerns about its powers over a wide array of and its structure.

The has shelved several rules and aggressively curtailed the agency's enforcement.

(Reporting by Hurley; Editing by Will Dunham)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 14 2019. 21:55 IST