Supreme Court Eyes The President's Power To Say 'You're Fired!'

At the U.S. Supreme Court Tuesday, the Trump administration is seeking to make it easier for the president to call in the heads of the nation's independent agencies and say those words he was famous for on TV: "You're fired!" In particular, the administration is asking the court to restrict or reverse a decision that dates back nearly a century, and that has been repeatedly reaffirmed.

In the short run, the fate of the Consumer Financial Protection Bureau hangs in the balance. In the long run, so too could the fate of independent regulatory agencies that have long governed everything from monetary policy to public health and safety.

A new watchdog for a broken system

In 2008, the U.S. economy was on the brink of financial disaster. Following nearly two decades of deregulation, U.S. banks had been offering home loans to people with poor credit, over leveraging, and engaging in widespread, excessive lending practices, resulting in the worst financial crisis since the Great Depression.

In 2009, Congress sought to re-establish oversight and regulation of the financial system. Among the remedies enacted was a law that consolidated the consumer protection powers of seven agencies into one — the CFPB. Placed in the offices of the Federal Reserve and funded directly by the Fed, the new agency was charged with protecting consumers and preventing a repeat of the 2008 financial crisis.

"The CFPB had two roles. One was to try to prevent an economic collapse of that kind ever happening again, and that was done largely through putting in place rules that safeguarded the mortgage market and ferreted out a lot of the irresponsible and ultimately failed lending that had occurred," says Richard Cordray, the first director of the CFPB. The other, he adds, was "to protect consumers."