*A June 29 U.S. Supreme Court split decision represents a major setback to both the Consumer Financial Protection Bureau (CFPB) and the consumers who have come to rely upon the agency. Since 2010, more than 25 million consumers were helped by the agency’s efforts that returned over $11 billion.
Although the case known as Seila Law v. Consumer Financial Protection Bureau, was argued on March 3 of this year, its origins date back to 2017 when Seila Law, a California-based debt relief firm, asked the CFPB to set aside a civil investigative demand (CID) that sought information to determine whether it was engaged in illegal debt relief practices.
CFPB declined to set aside the CID and turned to a California federal court to pursue its interests. In response, Seila Law restated its challenge of the independence of the agency’s Director who could only be removed by a President for cause, seeking to have the entire agency abolished as unconstitutional.”
The Supreme Court’s 5-4 decision refuted CFPB’s hallmark: its independent Director. By allowing for an agency Director to be removed for any reason, it now becomes possible for partisan interests to influence whether or not a full, 5-year term of office enshrined in the law will occur, or that powerful corporations will be held accountable.
The Court majority argued that CFPB is “unique”. “The CFPB Director has no boss, peers, or voters to report to,” wrote Justice Roberts in the majority opinion and was joined by Associate Justices Sam Alito, Neil Gorsuch, Brett Kavanaugh and Clarence Thomas.
“Yet the Director wields vast rulemaking, enforcement, and adjudicatory authority over a significant portion of the U. S. economy. The question before us is whether this arrangement violates the Constitution’s separation of powers…“We therefore hold that the structure of the CFPB violates the separation of powers,” continued the Chief Justice …The agency may therefore continue to operate, but its Director, in light of our decision, must be removable by the President at will.”
The creation of an independent consumer agency was the legislative intent defined in the Dodd-Frank Wall Street Reform Act. Enacted in the aftermath of the worst financial crisis since that of the 1930s Great Depression, CFPB assumed direct responsibility for financial oversight and enforcement on a range of consumer issues that included mortgages, small dollar loans, student debt, credit cards and more.
This agency authority included the rights to conduct investigations, issue subpoenas and civil investigative demands, initiate administrative adjudications, prosecute civil actions in federal court, and issue binding decisions in administrative proceedings.
The dissenting opinion written by Justice Elena Kagan was joined by Associate Justices Ruth Bader Ginsburg, Stephen Breyer, and Sonya Sotomayor.
“Throughout the Nation’s history, this Court has left most decisions about how to structure the Executive Branch to Congress and the President, acting through legislation they both agree to. In particular, the Court has commonly allowed those two branches to create zones of administrative independence by limiting the President’s power to remove agency heads… If precedent were any guide, that provision would have survived its encounter with this Court—and so would the intended independence of the Consumer Financial Protection Bureau.”
“The Court today fails to respect its proper role,” continued the dissenting opinion. “It recognizes that this Court has approved limits on the President’s removal power over heads of agencies much like the CFPB. Agencies possessing similar powers, agencies charged with similar missions, agencies created for similar reasons… Congress and the President established the CFPB to address financial practices that had brought on a devastating recession and could do so again. Today’s decision wipes out a feature of that agency its creators thought fundamental to its mission—a measure of independence from political pressure.”
It is noteworthy that while the case was under Supreme Court review, the current CFPB Director, made no effort to explain or defend the agency.
In the remaining few months in the current Congress, consumer advocates must now heighten their watchful role to ensure that as many other agency responsibilities can be preserved and pursued as legislatively intended.
Many reacted swiftly and directly.
“Though the consumer bureau remains intact, it is worrisome that the Court weakened its political independence from the preferences of any one administration or the political pressure of large financial institutions,” said Diane Standaert, Director of the Hope Policy Institute, a nonprofit focused on under-served communities of color and other low-income households. “As laid bare by COVID, the underlying disparities in access to safe financial services creates the foundation for disparities in economic opportunity, particularly for communities of color.”
“The CFPB was created after the Great Recession to protect Americans from unscrupulous businesses that have too much power to wreak havoc on the public,” said Ed Mierzwinski, U.S. PIRG Education Fund’s Senior Director of Federal Consumer Programs “Now, the Supreme Court has agreed with the CFPB’s director, who actively worked with the Trump administration and a debt collection law firm, of all things, to undermine the Bureau’s independence from politically-connected special interests.”
“The Seila decision therefore leaves the CFPB intact but weakens the Director’s independence, making it more likely that the Director will hesitate to cross the financial industry players that have the ear of the President — as has happened repeatedly under the current leadership of the CFPB,” noted Lauren Saunders, the Associate Director of the National Consumer Law Center.
“We have seen in this Administration how agency heads who dare to express independent views have been short-lived, and it is unfortunate that the consumer watchdog has lost the critical independence that Congress gave it when addressing the fallout from the 2008 financial crisis,” added Saunders. “Nonetheless, the CFPB survives as an agency with the rest of its critical consumer protection tools intact, and it will be up to the current and future CFPB directors to resist political pressure to favor corporations over consumers.”
“The Supreme Court’s decision to defang the CFPB’s for-cause removal provision will render the agency less effective and leave consumers vulnerable to bad actors on Wall Street,” said Will Corbett, Litigation Director with the Center for Responsible Lending.
“Predatory lenders and their allies in Congress have consistently tried without merit to weaken CFPB’s independence for political reasons. Today, the majority of the U.S. Supreme Court has joined in that effort, ensuring financial damage for consumers for years to come”, Corbett concluded.
Charlene Crowell is a Senior Fellow with the Center for Responsible Lending. She can be reached at [email protected].
Will Smith Settles Lawsuit Over ‘King Richard’ Biopic About Father of Venus and Serena Williams
*Will Smith’s Overbrook Entertainment has reached a settlement deal in a lawsuit over the rights to “King Richard” – the life story of Serena and Venus Williams’ father, Richard Williams.
We previously reported… Smith is set to play Richard in Warner Bros.’ upcoming film drama “King Richard.”
The project has hit a snag, however, as TW3 Entertainment and Power Move Multimedia filed a lawsuit against the studio and Smith’s Overbrook Entertainment production company, claiming breach of contract, among other things.
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According to Deadline, Richard Williams himself, his son Chavoita Lesane, and production company Star Thrower Entertainment were named in the lawsuit.
“This case presents an unfortunate and tawdry situation: the cold and calculating misappropriation and interference with Plaintiffs’ intellectual property,” says the seven-claim complaint from TW3 Entertainment and Power Move Multi Media. “Plaintiffs’ good faith and contractually protected efforts to bring an amazing story into visual art form were met with Defendants’ greed and disregard for Plaintiff’s existing rights.”
Less than two months after the breach of contract complaint was filed, all parties have now reached a deal, according to Deadline.
Reps from WB said “The matter has been resolved informally.”
According to the legal docs, the parties “have entered into a settlement of this matter, and Plaintiffs are dismissing their claims against these defendants with prejudice,” said an order signed on August 7 by Judge Mel Red Recana.
“King Richard,” directed by Reinaldo Marcus Green from a script written by Zach Baylin, is based on Williams’ 2014 memoir titled “Black and White: The Way I See It.”
“King Richard” is expected to be released in 2021.
Diamond Reynolds Settles Defamation Suit Against Minnesota Mayor, Receives Apology
*Diamond Reynolds, the girlfriend of Philando Castile, has received an apology from Elysian, Minnesota Mayor Tom McBroom as part of her dropping a defamation lawsuit against him.
Reynolds filed a defamation lawsuit last year against McBroom over his 2017 tweet where he stated she would spend her settlement money on “crack cocaine.”
If you recall, she and her four-year-old daughter were in the car with Castile when he was fatally shot in 2016 by now-former police officer Jeronimo Yanez during a traffic stop in St. Anthony, MN.
In November of 2017 she received a settlement of $800,000 from the city of St. Anthony, the League of Minnesota Cities Insurance Trust and the city of Roseville in connection with the shooting.
However, McBroom, who was a Rice County sheriff’s sergeant at the time, apparently had a huge problem with her being awarded the settlement and took to Twitter to bitch about it:
“She needs to come off County and State Aid now that she has some cash. It’ll be gone in 6 months on crack cocaine.”
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As a result of that tweet, McBroom was demoted by Sheriff Troy Dunn to deputy status in February 2018 for “misconduct.”
Reynolds, who livestreamed the aftermath of Castile’s fatal shooting in 2016, contended in her lawsuit that a tweet from McBroom, was defamatory, false and racially motivated.
As reported by the Star Tribune, attorneys on both sides of the defamation suit declined to reveal terms of the settlement — other than releasing the mayor’s apology to Reynolds.
“I want to apologize to you for my remarks I made when you were awarded money for the loss of … Mr. Castile. From everything I have read since, he was a good person and well liked within his community and school. You lost a loved one and your daughter witnessed a violent act that no young child should ever have to witness.
“My comments were hurtful towards someone I did not know and should never have been written. I hope one day you will forgive me for those ignorant words. I am not the person who has hate for anyone. I hope, pray, and wish nothing but the best for you and your daughter moving forward.”
Reynolds was seeking more than $50,000 in damages in her defamation lawsuit.
Family of Stephon Clark Irate After CA District Attorneys Urge NFL To Pull PSA (Watch)
*The family of Stephon Clark, who was shot and killed by Sacramento police in 2018, is speaking out over demands that the NFL pull a new PSA spotlighting the case.
“Enough is enough. I am sick and tired of the smear campaign against my brother who is no longer here to defend himself. Shame, shame on Anne Marie Shubert, shame on the California District Attorney’s Union… shame, shame, shame,” Clark’s brother, Stevante Clark, said during a family press conference held Wednesday outside the Sacramento County District Attorney’s office.
The PSA is part of the NFL’s “Inspire Change” campaign, featuring Stephon Clark’s mother speaking about the death of her 22-year-old son at the hands of Sacramento police in 2018. The video is one in a series aimed at raising awareness about systemic racism and police use of force.
The California District Attorney’s Association claims the video misrepresents the facts, citing two legal reviews of the shooting that found it to be justified. In the letter the CDAA sent, they ask the NFL to “reexamine the factual findings of Stephon Clark’s death” and produce another video.
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