12 U.S.C. § 5491

Establishment of the Bureau of Consumer Financial Protection

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(a) Bureau established

There is established in the Federal Reserve System, an independent bureau to be known as the “Bureau of Consumer Financial Protection”, which shall regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws. The Bureau shall be considered an Executive agency, as defined in section 105 of title 5. Except as otherwise provided expressly by law, all Federal laws dealing with public or Federal contracts, property, works, officers, employees, budgets, or funds, including the provisions of chapters 5 and 7 of title 5, shall apply to the exercise of the powers of the Bureau.

(b) Director and Deputy Director(1) In general

There is established the position of the Director, who shall serve as the head of the Bureau.

(2) Appointment

Subject to paragraph (3), the Director shall be appointed by the President, by and with the advice and consent of the Senate.

(3) Qualification

The President shall nominate the Director from among individuals who are citizens of the United States.

(4) Compensation

The Director shall be compensated at the rate prescribed for level II of the Executive Schedule under section 5313 of title 5.

(5) Deputy DirectorThere is established the position of Deputy Director, who shall—(A) be appointed by the Director; and(B) serve as acting Director in the absence or unavailability of the Director.(c) Term(1) In general

The Director shall serve for a term of 5 years.

(2) Expiration of term

An individual may serve as Director after the expiration of the term for which appointed, until a successor has been appointed and qualified.

(3) Removal for cause

The President may remove the Director for inefficiency, neglect of duty, or malfeasance in office.

(d) Service restriction

No Director or Deputy Director may hold any office, position, or employment in any Federal reserve bank, Federal home loan bank, covered person, or service provider during the period of service of such person as Director or Deputy Director.

(e) Offices

The principal office of the Bureau shall be in the District of Columbia. The Director may establish regional offices of the Bureau, including in cities in which the Federal reserve banks, or branches of such banks, are located, in order to carry out the responsibilities assigned to the Bureau under the Federal consumer financial laws.

(Pub. L. 111–203, title X, § 1011, July 21, 2010, 124 Stat. 1964.)Editorial NotesConstitutionality

For information regarding the constitutionality of provisions of subsection (c)(3) of this section, see the Table of Laws Held Unconstitutional in Whole or in Part by the Supreme Court on the Constitution Annotated website, constitution.congress.gov.

Statutory Notes and Related SubsidiariesEffective Date

Pub. L. 111–203, title X, § 1020, formerly § 1018, July 21, 2010, 124 Stat. 1979, renumbered § 1020 by Pub. L. 117–263, div. E, title LVIII, § 5851(a)(1), Dec. 23, 2022, 136 Stat. 3433, provided that: “This subtitle [subtitle A (§§ 1011–1018), enacting this part and amending section 9702 of Title 20, Education] shall become effective on the date of enactment of this Act [July 21, 2010].”

Notes of Decisions

Cited in 98 cases (55 in the last 5 years), 2013–2026 · leading case: PHH Corp. v. Consum. Fin. Prot. Bureau, 881 F.3d 75 (D.C. Cir. 2018).

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PHH Corp. v. Consum. Fin. Prot. Bureau, 881 F.3d 75 (D.C. Cir. 2018). · cites it 51× “5 PILLARD, Circuit Judge: We granted en banc review to consider whether the federal statute providing the Director of the Consumer Financial Protection Bureau (CFPB) with a five-year term in office, subject to removal by the President only for “inefficiency, neglect of duty, or…”

PHH Corp. v. Consum. Fin. Prot. Bureau, 839 F.3d 1 (D.C. Cir. 2016). · cites it 10× “See Dodd-Frank Wall Street Reform and Consumer Protection Act, § 1011, 12 U.S.C. § 5491 . Congress made the Director of the CFPB removable only for cause – that is, for “inefficiency, neglect of duty, or malfeasance in office” – during the Director’s fixed five-year term.”

Consum. Fin. Prot. v. Chance Gordon, 819 F.3d 1179 (9th Cir. 2016). · cites it 3× “The Act specified that the Bureau is an executive agency, 12 U.S.C. § 5491 (a), and would have a director who would be “appointed by the President, by and with the advice and consent of the Senate,” id.”

Jody Kaufmann v. Kilolo Kijakazi, 32 F.4th 843 (9th Cir. 2022). “” 12 U.S.C. § 5491 (c)(3). The Court held that the Director fell into neither of the two previously recognized exceptions to the President’s unrestricted removal authority.”

Consum. Fin. Prot. Bureau v. Morgan Drexen, Inc., 60 F. Supp. 3d 1082 (C.D. Cal. 2014). · cites it 5× “” 12 U.S.C. § 5491 (a). Those laws include 18 pre-existing consumer-protection statutes and Title X of the Dodd-Frank Act.”

Harry Calcutt III v. FDIC, 37 F.4th 293 (6th Cir. 2022). · cites it 2× “During the proceedings before the ALJs in this case, the CFPB Director also enjoyed for-cause protection from removal under 12 U.S.C. § 5491 (c)(3); however, before the Board issued its final order, the Supreme Court held this removal restriction to be unconstitutional.”

In re Grand Jury Investigation, 315 F. Supp. 3d 602 (D.C. Cir. 2018). · cites it 4× “After reviewing historical indicia of the meaning of the term "inefficient," Judge Griffith concluded that "an officer is inefficient when he fails to produce or accomplish the agency's ends, as understood or dictated by the President operating within the parameters set by…”

Consum. Fin. Prot. Bureau v. Nat'l Collegiate Master Student Loan Trust, 96 F.4th 599 (3rd Cir. 2024). · cites it 7× “20 There, the Court addressed 12 U.S.C. § 5491 (c), the statute establishing the CFPB and its Director.”

Consum. Fin. Prot. Bureau v. ITT Educ. Servs., Inc., 219 F. Supp. 3d 878 (S.D. Ind. 2015). · cites it 5× “” 12 U.S.C. § 5491 (c)(3). Compare with 15 U.”

Lower E. Side People's Fed. Credit Union v. Trump, 289 F. Supp. 3d 568 (S.D. Ill. 2018). · cites it 5× “1) ¶¶ 11-12, 14-15) Plaintiff contends that, under 12 U.S.C. § 5491 (b)(5)(B), Leandra English-the Deputy Director of the CFPB-"is the only person permitted under the law to be the Acting Director.”

Alaska Tr., LLC v. Ambridge, 372 P.3d 207 (Alaska 2016). · cites it 2× “We are persuaded by the rationale of those courts holding that the FDCPA applies to mortgage foreclosures. The Sixth Circuit in Glazer found persuasive the decision of the Fourth Circuit in Wilson v.”

Harris v. Pennsylvania Higher Educ. Assistance Agency/Am. Educ. Servs., 696 F. App'x 87 (3rd Cir. 2017). “It is instead an Executive agency established within the Federal Reserve System to “regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws” 12 U.S.C. § 5491 (a). Accordingly, the District Court also properly…”

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— 12 U.S.C. § 5491(b) — 1 case

Consum. Fin. Prot. Bureau, People of the State of New York v. (2d Cir. 2020).

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