- Case
- Seila Law LLC v. Consumer Financial Protection Bureau
- Court
- Supreme Court of the United States
- Citation
- 591 U.S. 197 (2020) (No. 19-7)
- Decided
- June 29, 2020
- Bottom line
- The CFPB's power to write and enforce FCRA and debt collection rules survived, but its priorities now shift with each President, which affects how much federal enforcement consumers can expect.
Background
Congress created the Consumer Financial Protection Bureau in the 2010 Dodd-Frank Act and transferred to it the administration of 18 existing federal consumer statutes, including the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. The CFPB writes the FCRA’s main implementing regulation (Regulation V), supervises the largest credit bureaus and many furnishers, and brings enforcement actions.
Unlike most independent agencies, which are run by bipartisan commissions, the CFPB was led by a single director serving a five-year term. The President could remove the director only for “inefficiency, neglect of duty, or malfeasance in office.” 12 U.S.C. § 5491(c)(3).
In 2017 the CFPB issued a civil investigative demand, essentially an administrative subpoena, to Seila Law, a California law firm providing debt-related legal services. The firm refused to comply, arguing the CFPB’s structure was unconstitutional. The district court enforced the demand, and the Ninth Circuit affirmed.
What the court held
Chief Justice Roberts wrote for the Court. On the main question, the vote was 5-4: “We therefore hold that the structure of the CFPB violates the separation of powers.”
The Court reasoned that Article II gives the executive power to the President, which generally includes the power to remove officers who exercise that power on the President’s behalf. It recognized two prior exceptions: multimember expert commissions such as the 1935-era Federal Trade Commission, and inferior officers with limited duties, such as the independent counsel. The CFPB director fit neither. The director is a single principal officer who can issue binding rules under 19 consumer statutes, set enforcement priorities, and seek large penalties. While the Court had upheld removal limits in other contexts, it declined to do so “when it comes to principal officers who, acting alone, wield significant executive power.”
The second question was the remedy. Writing for a plurality of three Justices on this point, the Chief Justice concluded that the removal restriction could be cut out of the statute while leaving the rest of the CFPB intact. Justice Kagan’s four-Justice opinion agreed with that result. The Court summarized the outcome this way: “The agency may therefore continue to operate, but its Director, in light of our decision, must be removable by the President at will.” Justices Thomas and Gorsuch would have refused to enforce the demand at all.
Because the demand had been issued under an unconstitutionally insulated director, the Court remanded for the Ninth Circuit to consider whether a later acting director had validly ratified it.
Our take
For consumers with credit reporting problems, the most important part of Seila Law is what did not happen. The Court did not strike down the agency, invalidate its rules, or erase the FCRA regulations the CFPB administers. Regulation V, the rules on furnisher accuracy and direct disputes, and the CFPB’s enforcement authority all survived.
What changed is political accountability. A director who serves at the President’s pleasure will generally pursue that President’s priorities. That cuts both ways. Since 2020 the CFPB’s approach to credit reporting has swung substantially between administrations, including the issuance and later withdrawal of a large body of FCRA guidance. The Supreme Court later rejected a separate challenge to the CFPB’s funding mechanism in CFPB v. Community Financial Services Association (2024).
The practical lesson is that federal enforcement is not something consumers can count on in any given year. The FCRA’s private right of action, which lets individuals sue bureaus and furnishers directly for damages, is not affected by who runs the CFPB, and it remains the most reliable tool for fixing an error.
What it means if your report is wrong
Nothing in Seila Law changes your rights under the FCRA. You can still dispute inaccurate information with the credit bureaus, the bureaus and furnishers must still investigate, and you can still sue for actual damages, statutory damages for willful violations, and attorney’s fees. You can also file a complaint with the CFPB, but do not rely on that alone. If an error is costing you credit, housing, or a job, a free case review can explain your options, and there is no fee unless we win.
Sources
Primary
Commentary we reviewed
Updated November 1, 2026. "Our take" is the firm's opinion. This page is general information, not legal advice, and later decisions may change the law.