Joseph Reilly Quoted by Law360 on Supreme Court Decision to Hear CFPB Appeal

October 28, 2019

McGuireWoods senior counsel Joseph Reilly was quoted in an Oct. 23 article in Law360 on the U.S. Supreme Court’s decision to hear Seila Law LLC v. CFPB, a case challenging the constitutionality of the Consumer Financial Protection Bureau’s single-director structure and the statutory provision that shields the director from being removed by the president except “for cause.” One related issue is whether the CFPB must be shut down if the “for-cause removal” clause is unconstitutional, or if the severability clause in the CFPB section of the Dodd-Frank Act would leave other CFPB provisions unaffected.

Reilly commented, “First of all, I think it is very likely, if not overwhelmingly likely, that the court will find this for-cause restriction on the president's removal authority to be unconstitutional.” He added, “But I think it’s quite likely that their remedy for a violation is going to be limited.” As far as what form that remedy may take, Reilly cited then-Judge Brett Kavanaugh’s ruling on the issue when he sat on the D.C. Circuit. “There is a pretty likely outcome here. That's the outcome that now-Justice Kavanaugh arrived at when he considered the remedy question — just strike the restriction and leave everything else be.”

Regarding the practical effects of a ruling, Reilly said, “The practical upshot here in the short term is likely to be zero. This president already has his choice for leadership at the CFPB. It won't really change anything if he has the ability to remove his choice, because he's unlikely to want to do so.”

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