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Thursday, July 9, 2020

SCOTUS Decision Rules on Critical Issue Advocated for By Housing Clinic

The Supreme Court’s recent decision in Seila Law LLC v. CFPB addressed a critical issue argued by Yale Law School’s Housing Clinic in an amicus brief the Clinic submitted to the Court. In its decision on June 29, 2020, the Court struck down the for-cause removal provision regarding the director of the Consumer Financial Protection Bureau (CFPB) from the rest of the Dodd-Frank Act, but, in line with the position taken by the Clinic on this issue in its brief, severed the provision to leave the CFPB intact.

The Clinic’s amicus brief, filed in January 2020 argued that the for-cause removal provision on the CFPB Director, if held to be unconstitutional by the Supreme Court, should be severed from the remainder of the Dodd-Frank Act and from the rest of the provisions establishing the CFPB.

The Clinic urged the Court to give effect to the Dodd-Frank Act’s severability clause and argued that congressional intent plainly weighed in favor of a CFPB with a director removable at-will, rather than no CFPB at all. The brief also described the origins of the CFPB in support of the argument that failing to sever the for-cause removal provision would contravene the congressional intent to establish a sole federal regulator charged with protecting consumers. Seven Justices agreed with the Clinic on the severability question.

“Although we are disappointed that the removal protection on the CFPB Director is no more, as members of a clinic that often brings actions on behalf of our clients under CFPB regulations, we are grateful that the Bureau, and the stabilizing effect it has had on the marketplace over the past several years, will continue to exist. We believe that severing the removal provision accords with Congress’s intent,” said Housing Clinic member Natasha Khan ’21, who took the lead in drafting the Housing Clinic’s section of the brief.

The Clinic joined the brief alongside the National Consumer Law Center, the Center for Consumer Law and Education, the Center for Consumer Law and Economic Justice, and Professor Craig Cowie, Director of the Blewett Consumer Law & Protection Program at the University of Montana.

“We believed that severability would ultimately play a key role in this case, and were glad that the Court adopted our view of the issue, allowing the CFPB to continue to safeguard consumers,” said Clinic member Jeffrey Schroeder ’21, who also worked on the brief.

Work on the amicus brief gave students valuable exposure to the field of consumer law, according to George W. and Sadella D. Crawford Visiting Clinical Lecturer in Law and Housing Clinic supervisor Jeffrey Gentes.

“It was great working with our students along with some of the other top consumer law clinics in the country and the premier consumer law nonprofit on this brief,” he said.

In the Housing Clinic, students work on foreclosures, evictions, and fair housing issues while meeting to discuss general policy issues and the role discrimination plays in the government and industry’s treatment of homeowners and renters. The clinic also tackles legislative remedies that arise from clinic clients’ cases.