The CFPB and the Future of Confirmations
When Congress created the Consumer Financial Protection Bureau (CFPB) in 2010 under the Dodd-Frank Act, it made the head of the new agency a presidential appointee whose confirmation must be approved by the Senate. But it also said the president could only remove the CFPB’s director if he or she was guilty of “inefficiency, neglect of duty, or malfeasance in office.”
This Monday, almost a decade to the day that the CFPB was created with the stroke of a presidential pen, the U.S. Supreme Court struck down that provision, ruling that the bureau’s director could be fired by the president for any reason, at any time. Specifically, in the Court’s majority opinion, Chief Justice John Roberts stated, “[T]he structure of the CFPB violates the separation of powers. … its director, in light of our decision, must be removable by the president at will.”
In short, the CFPB director is now like hundreds of other presidential appointees.
But, before getting to that, a little history.
Federal lawmakers had included the prohibition against firing the CFPB director because they wanted the bureau to have some independence from the political winds of the day generally and the president specifically. The idea of an independent head of an agency was enshrined in a ruling issued by the Supreme Court nearly 90 years ago. As National Public Radio has explained, in 1933, President Franklin Roosevelt fired Federal Trade Commission (FTC) Commissioner William Humphrey because Humphrey had been appointed by Republican President Herbert Hoover. Humphrey also “was a conservative who disagreed with Roosevelt's policy views” and “because the FTC had oversight over many progressive New Deal policies, Roosevelt wanted Humphrey replaced with his own appointee.”
The case reached the Supreme Court, and, in 1935, the justices ruled “unanimously that the president could not dismiss FTC commissioners the way he could his own Cabinet or other members of his administration.” That’s because, as the Court explained “Congress had created the FTC to perform quasi-judicial, quasi-legislative functions and therefore intended it to be politically independent.” As NPR noted, the Humphrey decision was “reaffirmed dozens of times since it was decided 85 years ago.”
Though some presidential appointees were protected by these rulings, most individuals who serve in appointed positions in executive branch agencies remain there at the pleasure of the president—meaning they can be fired at any time.
The U.S. Constitution authorizes the president “to appoint individuals to executive and judicial offices with the advice and consent of the Senate.” U.S. Senate historians are more specific, explaining the president nominates all federal judges; specified officers in cabinet-level departments, independent agencies (like the CFPB), the military services, the Foreign Service, and uniformed civilian services; and U.S. attorneys and U.S. marshals.
In the modern era, this undertaking is a significant one. The president is responsible for filling more than 300 positions across 14 cabinet agencies and more than 100 positions at independent agencies like the CFPB. Additionally, “approximately 4,000 civilian and 65,000 military nominations are submitted to the Senate during each two-year session of Congress” by the president.
Judicial and military posts are different, but the vast majority of the cabinet agency and civilian appointments serve at the pleasure of the president. They’re often referred to as “political appointees” because they are attached to a certain administration.
These spots do not all need Senate confirmation, of course, but many do. According to the Partnership for Public Service (PPS), there are more than 1,200 jobs in the executive branch that require confirmation by the upper chamber of Congress. These positions include Cabinet secretaries, deputy and assistant secretaries, general counsels, heads of agencies, and ambassadors.
At least 250 of these positions currently have no occupants. The PPS has broken the vacancies down by federal agency. While the U.S. Department of Housing and Urban Development has a vacancy rate of just 15 percent, 65 percent of presidentially-appointed positions at the Department of Homeland Security currently sit unoccupied. (That number includes the top of the org chart, as Homeland Security does not currently have a Senate-confirmed secretary.) More than half of the Senate-confirmed positions at the U.S. Department of Justice also are unfilled.
No matter who wins the election in November, these and many these positions will need to be filled in 2021. If Vice President Joe Biden wins, he will replace all of those “political appointees.” But because, as the Center for Presidential Transition (CPT) explains, there is “significant turnover in critical leadership jobs following [a president’s] re-election,” it is likely that, if he is victorious in November, President Donald Trump will have even more spots to fill, too.
The CPT has examined turnover rates between the first and second terms of an administration. According to its data, “[F]rom Election Day through the first six months of the second terms of Presidents Bill Clinton, George W. Bush and Barack Obama, an average of 43 percent of their Cabinet secretaries, deputy secretaries and undersecretaries left their jobs.” Additionally, “During this period between the election and the early months of the second term, five Cabinet secretaries left the Clinton administration, eight departed the Bush administration and seven left the Obama administration.”
President Trump has a few cabinet secretaries who have been with him since the beginning of his term in 2017, including U.S. Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin. U.S. Trade Representative Robert Lighthizer also has been with the president since the beginning. These individuals are among the most likely to seek an exit. Indeed, the CPT found, “For the past three administrations, an average of only 11 percent of high-level appointees served until the end of the second term” and “an average of 44 percent of individuals holding these jobs left office at various stages of the first terms of the Clinton, Bush and Obama administrations.”
In other words: even before the Supreme Court’s ruling this week, the Senate’s 2021 confirmation calendar was going to be full.
With the ruling, it might be more so—and more contentious.
The Court’s decision means Kathy Kraninger, the current head of the CFPB, would be likely to be removed from her position if Joe Biden is elected president. The question is: how will the decision impact other independent agencies like the U.S. Securities and Exchange Commission, the Federal Trade Commission, and the Federal Deposit Insurance Commission, which are supposed to be independent and whose leadership can only be fired for cause?
Andrew Pincus, who filed an amicus brief for the U.S. Chamber of Commerce in the CFPB case, told NPR back in March that if the Court ruled the president could fire the CFPB director it would have no bearing on independent agencies like the SEC since those “multimember” bodies are required to have individuals from different parties. Pincus noted commissioners’ terms are staggered, “so most presidents will have an opportunity to appoint a number of those people.” (In other words, presidents have a way to make their mark on these agencies regardless of who runs the show.)
All of that, Pincus concluded, “is a check on the exercise of government power" that, when it comes to the president’s ability to fire, makes the SEC unlike the CFPB.
We’ll see. As reporter Jonathan V. Last explained in 2008, based on federal court precedent, getting rid of independent commissioners “for cause” has been broadly interpreted by the courts, which means 2021 could bring a few more confirmations than usual.