Consistent with its purported originalist ethos, the Supreme Court frequently invokes the past to justify its decisions curtailing agency powers. The heads of the Consumer Financial Protection Bureau (CFPB) and the Public Company Accounting Oversight Board (PCAOB) are subject to at-will removal because, in the Court’s view, no agencies like them have ever existed before. The CFPB’s funding structure, on the other hand, is permissible because it is similar to how Congress funded the Post Office in 1792. The Court not infrequently buttresses its historical analysis with hypotheticals about future harms to the separation of powers. Unless the CFPB Director is removable, an “unlucky President might get elected on a consumer-protection platform and . . . [be] saddled with a holdover Director from a competing political party who is dead set against that agenda.” Similarly, preventing the President from removing members of the PCAOB presents the risk of the agency becoming too responsive to Congress, but not responsive enough to the President.
The tensions between this originalist formalism and more pragmatic considerations were on display during December’s oral argument in Trump v. Slaughter, the case reconsidering the scope of the President’s power to remove the heads of multi-member commissions under Humphrey’s Executor v. United States. The Court jumped between the Decision of 1789, the Sinking Fund Commission, and whether a hypothetical future Congress might seek to undermine the President by converting every cabinet agency into a multi-member commission. The January oral argument in Trump v. Cook scrutinizing Federal Reserve (Fed) governors’ for-cause removal protections had a similar feel. The Fed is politically independent, the Justices say, because the Fed ostensibly follows in the tradition of the First and Second Banks of the United States. In the next breath, however, they wonder whether granting the President the power to remove Governor Lisa Cook “could trigger a recession.”
There is a great deal at stake for the financial system and the economy in the outcomes of Slaughter and Cook. This includes the vital role courts play in balancing the distribution of power between the executive and legislative branches—the “structure of the government,” as Justice Kavanaugh called it in Cook. The stakes of these decisions are equally as high, if not higher, in other areas of regulation—from environmental safeguards to labor protections to health policy to workplace and product-safety rules.
Yet, these discussions speak only obliquely to the reality of what is happening to administrative agencies at the hands of the President, Congress, and the courts. In a sense, this is unsurprising. Many of the Justices are ostensible originalists or textualists, not legal realists. But talking past this context allows judges committed to the Unitary Executive Theory (UET) of governance to gloss over the real-world implications of cases that, though cloaked in constitutional rhetoric, are fundamentally about shaping policy outcomes—from who gets to make policy to who benefits from those policies.
This post is the first of two installments seeking to fill this lacuna by examining the recent legal and political experiences of the financial regulatory agencies. Financial regulation offers a useful case study because it has been the area where recent case law on presidential removal power has originated—from Free Enterprise Fund v. PCAOB to Selia Law v. CFPB. The recent history of these agencies does not suggest a trend of agency overreach or congressional aggrandizement as the Court conceives of it. Instead, this examination surfaces two insights. First, each of the three branches of government—legislative, executive, and judicial—is using its respective powers to diminish regulatory agencies’ authorities and functioning. And second, continuing the trend of agency diminution will inhibit Presidents’ ability to carry out their agendas—at least Presidents of certain parties—and undermine the faithful execution of laws enacted by Congress.
Congress Has Attempted to Thwart the Executive in Recent Years—Just Not in the Ways Some Justices are Worried About
During the Slaughter argument, both Chief Justice John Roberts and Justice Brett Kavanaugh pressed Respondent’s counsel on whether Congress could exert too much control over executive branch agencies by, for example, converting cabinet agencies into multi-member commissions, thereby protecting leadership from removal.[1] Members of Congress have indeed attempted to, in the words of Justice Kavanaugh, “thwart” the will of the Executive—just not in the ways these Justices are concerned about. Instead, Congress has deviated from its historically cabined role to “advise and consent” and now is making executive nominations into a form of political trench warfare to achieve outcomes that cannot be accomplished through the legislative process.
Consider the example of the CFPB. Like the Dodd-Frank Act more broadly, most all congressional Republicans opposed the CFPB. Having lost the legislative fight, forty-four Republican senators announced they would block the confirmation of any CFPB director nominee until statutory changes were made to the CFPB’s structure. This blockade—the first of its kind in Senate history—lasted almost two years. Richard Cordray, President Barack Obama’s nominee, was ultimately confirmed, but only after a failed recess appointment and Senate Majority Leader Harry Reid (D-Nev.) threatening to change Senate rules to prevent Republicans from filibustering nominees. (These rules have been further diluted in recent years in response to the increasing use of the filibuster for all manner of nominees.) During the period of this blockade, in the absence of a Senate-confirmed director, there were questions about the CFPB’s ability to exercise some of its statutory functions, including prohibiting unfair, deceptive, or abusive acts or practices and supervising certain nonbank financial services providers. (Once Cordray was confirmed, the CFPB ratified its prior actions.)
Individual Senators also sought to leverage the Senate’s role in the appointments process to hobble President Obama’s agenda by creating leadership vacuums atop certain agencies. In January 2015, Senator Richard Shelby (R-Ala.) took the gavel as Chairman of the Senate Banking Committee. Senator Shelby was facing a primary challenge as part of his re-election campaign and was reportedly concerned that approving nominees that would help enact the agenda of President Obama, who was reviled by the Republican voter base, would jeopardize his re-election. As a result, Shelby established a personal blockade, refusing to advance any of the thirteen nominees referred to his committee. This again stymied the work of some agencies. For example, it prevented the board of the Export-Import Bank from establishing a quorum, preventing the agency from approving financing deals over a certain size threshold.
Given these experiences, what recourse would a future Democratic President have when there are Republican holdovers leading various agencies and a Republican-controlled Senate that refuses to confirm the President’s nominees?
During the first year of the Biden Administration, for example, the Trump-nominated Chair of the Federal Deposit Insurance Corporation (FDIC), Jelena McWilliams, attempted to block the FDIC’s board majority from voting on policy initiatives consistent with President Joe Biden’s agenda. The Democratic appointees to the FDIC board sought to bring those measures to a vote, prompting a dispute which ultimately resulted in McWilliams’ resignation and replacement with the next board member in the line of succession, Martin Gruenberg. (The Justice Department’s Office of Legal Counsel later determined that McWilliams was wrong on the law, and the Democratic board members were correct that a majority of FDIC board members, not the chair, have the power to determine the board’s agenda.)
If those events were to repeat themselves, a President who lacks the ability to confirm a replacement will be stuck with a choice between keeping a prior President’s nominees or removing that nominee and leaving a non-functioning agency without political leadership. In such a scenario, the Vacancies Act provides limited value if all nominees requiring Senate confirmation—especially to multi-member commissions—are being blockaded.
The Executive is Using New and Unprecedented Tactics to End-Run Laws Enacted by Congress
In contrast to the Chief Justice and Justice Kavanaugh, Justice Elena Kagan posited during the Slaughter argument that the “more realistic danger here is that we’ll have an [agency] as authorized by Congress, by law, that won’t have any employees in it.” This is indeed a realistic danger because it isn’t a hypothetical. It is the Trump Administration’s express goal at the CFPB. Further, the Administration has used the presidential removal and nomination powers to effectively convert multi-member commissions into single-director agencies.
Picking up where congressional Republicans left off, the Trump Administration has sought to all but eliminate (or in the words of Elon Musk, “delete”) the CFPB without a single change to the statutory text of the law that created it, the Dodd-Frank Act. The Acting CFPB Director—who is simultaneously serving as Director of the Office of Management and Budget—has attempted to lay off the vast majority of the CFPB’s employees. He was prevented from doing so by the intervention of a U.S. federal district court order, which was then stayed by a panel of the D.C. Circuit Court of Appeals. The entire D.C. Circuit will now re-hear the case. In the meantime, Congress has weighed in, including in the recent appropriations law a policy that all agencies are to cease any further reductions in force.
The Acting CFPB Director has nonetheless continued his efforts. The CFPB, armed with a Justice Department opinion, has asked a court to invalidate its funding structure, arguing it might be unconstitutional—notwithstanding the recent Supreme Court decision, authored by Justice Clarence Thomas, upholding the constitutionality of the CFPB’s funding. A federal district court rejected the CFPB’s argument, other litigation is pending, and the CFPB recently—finally—drew funds to continue its operations.
Throughout this effort, the administration has used legal maneuvers to leave the CFPB’s Acting Director in place. In November 2025, the White House nominated another official to serve as the CFPB’s permanent director. However, the administration publicly acknowledged that the nomination was merely a “technical” maneuver to extend the clock on the Acting Director’s term under the law governing vacancies. Having achieved this stated goal, thereby enabling the Acting Director to continue on through August 2026, the Senate returned the nomination at the expiration of the last congressional term without taking any action on it.
This political interference is not unique to single-director agencies, but is also occurring at multi-member commissions. According to both the Chief Justice’s majority opinion in Seila Law and Justice Kavanaugh’s dissent in the D.C. Circuit’s en banc decision in PHH v. CFPB, the multi-member commission structure helps prevent arbitrary enforcement actions and unlawful or otherwise unreasonable rules. The multi-member structure (particularly with partisan balance requirements), they have argued, prevents arbitrary decision-making and abuses of power and protects individual liberty; ensures more deliberative decision-making; and encourages compromise and consensus that tends to lead to decisions that are less extreme or idiosyncratic.
Similarly, during the blockade of Cordray’s nomination, forty-four Senate Republicans sent a letter to President Obama outlining their objections to the CFPB’s structure. In it, they called for the CFPB to be converted into a commission, to have its budget subjected to annual congressional appropriations, and other reforms. Expanding the presidential removal power was nowhere on that list. As others have noted, the Senators’ concerns were largely framed in practical terms, not constitutional ones: converting the CFPB into a commission would “reduce the potential for the politicization of the CFPB and ensure the consideration of multiple viewpoints in the CFPB’s decision-making.”
With Slaughter now before the Court, however, Justice Kavanaugh and the signatories of the CFPB letter appear less concerned with these policy rationales.
The FDIC, Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and National Credit Union Administration (NCUA) have all been structured by Congress to operate as bipartisan commissions. Nonetheless, President Trump has ostensibly fired the Democratic members of the NCUA and has yet to nominate a single Democrat to any of these agencies. As a result, there is currently no Democratic appointee serving on any of these commissions, resulting in functional one-party control. For the FDIC, this trend dates to President Trump’s first term, when he neglected to nominate a single Democrat to the FDIC board during the entire four years of his term. (Mr. Gruenberg was only able to serve as Acting Chair when McWilliams resigned because the Federal Deposit Insurance Act permitted him to continue occupying his board seat after the expiration of his previous term.) Making things even more complicated, the lone remaining NCUA board member has been appointed to join the PCAOB; however, he is unable to do so until his successor is confirmed because the NCUA board would then lack a quorum to conduct its business.
The Real-World Realities of Slaughter
During the Slaughter argument, Justice Kagan argued that she and her colleagues should not “blind [themselves] to the real-world realities of what [their] decisions do.” The conservative Justices saw things differently. Justice Samuel Alito and Justice Kavanaugh disagreed with Kagan’s warnings about the consequences, expressing skepticism toward the Respondent’s arguments that, as they couched it, “if we were to rule in [the Government’s] favor . . . the entire structure of the government would fall,” and there would be “chaos and disruption.” Justice Amy Coney Barrett, for her part, wondered whether the Court should even be in the business of trying to forecast the potential unintended consequences of its rulings. No one knows “what a Congress in ten or twenty or thirty years might do,” she argued, and the “one thing history shows, is that we can’t anticipate what might happen.”
Again, the Justices do not need to look ten or twenty or thirty years down the road to gain a sense of the potential real-world consequences of their decision. As the Court considers this case, an agency is in the process of being administratively dismantled notwithstanding the lack of congressional votes to do so legislatively. Bipartisan multi-member commissions are being functionally converted into one-party agencies—again, in contravention of law. This is not unique to financial regulation. It is part of a broader weakening of multi-member commissions—including the Federal Trade Commission at issue in Slaughter and the Consumer Product Safety Commission—and the dismantling of agencies like the U.S. Agency for International Development and the Department of Education.
During the Slaughter argument, Justice Neil Gorsuch floated one way of preventing Presidents from abusing their newfound and expansive removal powers. Gorsuch suggested the Court could “reinvigorate” the nondelegation doctrine, limiting Congress’s ability to provide agencies with broad authorities. This suggests that the Court may resurrect nondelegation, its cousin the major questions doctrine, and other interpretive tools that prevented agencies from regulating during the Biden Administration. Importantly, however, these doctrines largely only bind Presidents who want to enact regulations that protect the public. They are of no help where a President is undermining the power of their own agencies.
Thus, this tool is more likely to apply to future Democratic administrations, as opposed to the current one. In contrast to the Court’s prior rulings against the Biden Administration—including its environmental regulations and its student debt cancellation program, among other initiatives—the Court has allowed many of President Trump’s Executive actions to stand. The Court’s approach to the tariffs case, Learning Resources v. Trump, might be the exception that proves the rule. The Court could invalidate some of the tariffs on the basis of the nondelegation or major questions doctrine. Alternatively, and more likely, it may avoid narrowing or expanding those tools and instead preserve them for resurrection under a future President.
These developments foreshadow a post-Slaughter future where Presidents—or at least Presidents of a certain party—can use the appointment power to control both single-director and multi-member agencies, thereby undermining the sort of reasoned policymaking that Congress and the courts have said is both constitutional and desirable. Due to the Senate’s undemocratic features, the most likely scenario is that Presidents of the Democratic Party will be stymied by a Republican-controlled Senate if they try to rebuild the capacity of these agencies. It is unclear whether and to what extent agencies will operate with bipartisan, multi-member leadership—or even any functional leadership at all.
Again, the Court in Seila Law v. CFPB said the removal power is essential to ensuring a President is not “saddled with a holdover [agency official] from a competing political party who is dead set against [their] agenda.” Yet, the same conservative Justices who wrote those words could make the situation worse, not better, by overruling Humphrey’s Executor.
Graham Steele is an academic fellow at the Rock Center for Corporate Governance at Stanford Law School and a senior fellow at the Roosevelt Institute. From 2021-2024 he served as the Assistant Secretary for Financial Institutions at the U.S. Treasury Department, and from 2015-2017 he served as the Minority Chief Counsel for the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
[1] The Chief Justice’s hypothetical requires one to imagine that the congressional majority and the President are of the same party, such that the President would not veto the change. In that scenario, it’s unclear why any President of any party would agree to cede the removal power to Congress. In Justice Kavanaugh’s hypothetical, by contrast, Congress is passing legislation to “thwart … Presidents of the opposite party.” In that situation, it’s unclear why the President wouldn’t veto the relevant legislation.
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