The Supreme Court on Monday handed President Trump expansive authority to fire the leaders of independent federal agencies, a ruling that could reshape oversight of the credit and collection industry for years to come.
In Trump v. Slaughter, the justices voted 6 to 3 to overturn Humphrey’s Executor, the 1935 precedent that let Congress shield Federal Trade Commission members from removal except for inefficiency, neglect of duty, or malfeasance. Writing for the majority, Chief Justice John Roberts concluded that the FTC wields executive power and that its commissioners must therefore answer to the president, who may dismiss them at will.
The decision reaches well beyond the FTC. By the dissent’s count, roughly two dozen multimember bodies historically treated as independent now stand exposed, including the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Consumer Product Safety Commission, the National Credit Union Administration, and the Federal Deposit Insurance Corporation. For an industry regulated on multiple fronts, the practical upshot is that future presidents can swiftly reshape enforcement priorities by replacing commissioners whose views diverge from the administration’s.
The ruling also appears to end a long-running debate over the Consumer Financial Protection Bureau’s structure. Ever since the bureau’s creation, critics have urged Congress to swap its single director for a five-member bipartisan commission. After Monday, that fix looks hollow. A president could simply fire opposing-party members and leave their seats empty, as has already happened at the FTC, which is operating with two Republican commissioners despite a statutory complement of five. The bureau’s director already lost removal protection in Seila Law in 2020.
On the same day, in Trump v. Cook, the court drew a sharp line around the Federal Reserve. By a 5 to 4 vote, the justices left in place a lower-court order keeping Governor Lisa Cook in her seat while she contests her removal. Roberts, joined by the three liberal justices and Justice Brett Kavanaugh, ruled narrowly that the president failed to give Cook the notice and opportunity to respond that the Federal Reserve Act requires before a for-cause firing. The majority stressed the central bank’s singular historical status and its tradition of insulation from political pressure over monetary policy.
The two outcomes leave an unresolved tension. The court embraced sweeping presidential control over executive officers while carving out, at least for now, an exception for the Fed. Justice Amy Coney Barrett, dissenting in Cook, faulted the majority for choosing to “go big” when restraint would have served.
Whether the Fed’s shield extends beyond monetary policy, and which financial regulators fall next, will be settled in litigation to come.
Read the ruling in Trump v, Slaughter. Read the ruling in Trump v. Cook
