That has long prompted complaints from Republicans and business groups that the bureau, which was set up to ensure that consumers were not taken advantage of by credit card companies, debt collectors and other financial firms, enjoyed unchecked power. In her dissent, Justice Kagan wrote that this structure was laudable.
“In the midst of the Great Recession, Congress and the president came together to create an agency with an important mission,” she wrote. “It would protect consumers from the reckless financial practices that had caused the then-ongoing economic collapse. Not only Congress but also the president thought that the new agency, to fulfill its mandate, needed a measure of independence.”
Justices Ruth Bader Ginsburg, Stephen G. Breyer and Sonia Sotomayor joined Justice Kagan’s dissent.
Since taking office, President Trump has targeted the agency, appointing Mick Mulvaney, a longtime critic of the bureau, as interim director after the agency’s original director, Richard Cordray, resigned in late 2017. Mr. Mulvaney, who was also the budget director, saw it as an opportunity to dismantle an agency vilified by Republicans since its inception as an example of government overreach.
The case before the court, Seila Law v. Consumer Financial Protection Bureau, No. 19-7, was brought by a law firm that objected to an investigation of aspects of its debt relief services. The firm challenged the bureau’s power to conduct the investigation, saying its director was unconstitutionally insulated from presidential control.
“I think people who brought the challenges to the agency, some of them were really seeking to damage the agency,” Mr. Cordray said in an interview. “It’s really avoided being deeply damaged by this decision.”
Mr. Cordray also noted that removing the uncertainty over whether the bureau was constitutional should be helpful in strengthening its enforcement powers because the question was sometimes raised in legal challenges to its actions.
Business groups, which shared that view, challenged the law’s limit on presidential power in court, saying that it violated the separation of powers. The Trump administration agreed with the challengers. The bureau once took the opposite position but changed its stance last year, agreeing that its director could be fired at will.