In a pair of very important decisions issued today, the U.S. Supreme Court reshaped the constitutional landscape governing independent federal agencies. In Trump v. Slaughter, Court overruled the 91-year-old precedent of Humphrey’s Executor v. United States, 295 U.S. 602( 1935), and held that members of the Federal Trade Commission may be removed by the President at will, notwithstanding statutory “for cause” removal protections. On the same day, however, in Trump v. Cook, the Court declined to permit President Trump to remove Federal Reserve Governor Lisa Cook, signaling that the Federal Reserve occupies a constitutionally distinct status.
Last year, the Supreme Court issued opinions on its “shadow” docket denying Slaughter’s motion for a preliminary injunction requiring her to be reinstated as a member of the Federal Trade Commission and granting a preliminary injunction to Cook requiring that she be reinstated as a member of the Federal Reserve Board. As a result of those actions, the opinions issued today were no surprise.
Together, these decisions significantly expand presidential authority over the administrative agencies while preserving, at least for now, the longstanding independence of the nation’s central bank.
Trump v. Slaughter: The End of Humphrey’s Executor
The case arose after President Trump removed FTC Commissioners Rebecca Slaughter and Alvaro Bedoya in March 2025 without asserting any of the statutory grounds for removal— “inefficiency, neglect of duty, or malfeasance in office.” Commissioner Slaughter challenged her dismissal, relying on the Supreme Court’s landmark 1935 decision in Humphrey’s Executor, which had upheld the removal protections for FTC commissioners.
The majority emphasized that modern FTC commissioners exercise substantial executive authority, including:
- promulgating substantive rules carrying the force of law;
- conducting investigations;
- initiating enforcement actions;
- adjudicating disputes; and
- seeking substantial civil penalties in federal court.
According to the Court, these activities constitute “the very essence of ‘execution’ of the law,” making presidential control constitutionally required.
Perhaps most importantly, the Court expressly overruled Humphrey’s Executor to the extent that decision permitted Congress to insulate executive officers from presidential removal. Chief Justice Roberts described Humphrey’s Executor as “a result in search of a rationale” and concluded that stare decisis considerations did not justify retaining the precedent.
The Court reaffirmed the “unitary executive” theory that executive officers exercising presidential power must remain accountable to the President, who in turn remains accountable to the electorate.
Potential Implications for Consumer Financial Services Regulation
The implications for federal financial regulators could be profound.
Although the CFPB’s single-director structure already lost its removal protection in Seila Law LLC v. CFPB, many other financial regulators continue to operate under statutory tenure protections. Today’s decision raises questions regarding the continued viability of those protections for officials who exercise significant executive authority.
Among the agencies potentially affected are:
- the Federal Deposit Insurance Corporation;
- the National Credit Union Administration;
- the Consumer Product Safety Commission;
- the Securities and Exchange Commission;
- the Commodity Futures Trading Commission; and
- other multimember commissions historically regarded as “independent.”
Whether these agencies remain insulated from Presidential removal authority will likely become the subject of future litigation.
The decision may also alter the practical dynamics of federal regulation. Future Presidents may now have substantially greater ability to reshape agency priorities by replacing commissioners whose policy views differ from those of the Administration.
Also, this opinion is the death knell of the argument made ever since the CFPB was created that the Congress should change the governance of the CFPB from a sole director to a five-member bi-partisan commission since the President could ignore any Congressional directive requiring that two members of the commission be individuals who are members of the other political party. Currently, there are only two FTC commissioners, both Republican with one serving as the Chair, even though the FTC Act provides for five commissioners. Thus, even if the CFPB leadership were changed to a multi-member, bipartisan board, a President could fire members of the opposing party from the board and retain or appoint only members of the President’s party, leaving the seats for members of the opposite party unfilled.
Trump v. Cook: The Federal Reserve Exception
Remarkably, on the very same day, the Supreme Court issued a separate 5-4 decision in Trump v. Cook declining to permit President Trump to remove Federal Reserve Governor Lisa Cook while litigation challenging her dismissal proceeds.
Chief Justice Roberts again wrote for the majority, joined by Justices Sotomayor, Kagan, Kavanaugh, and Jackson. The Court left in place a lower court order preventing Cook’s removal pending final resolution of the case. The dispute arose after President Trump attempted to remove Governor Cook based on allegations of mortgage fraud that Cook denies. The Court concluded that Cook could remain in office while her challenge continues.
Most significantly, the Court strongly suggested that the Federal Reserve occupies a special constitutional and historical position. The Slaughter majority itself expressly noted that the Court was not deciding the constitutionality of tenure protections for Federal Reserve officials and observed that the Federal Reserve may follow in the historical tradition of the First and Second Banks of the United States.
Thus, although Slaughter substantially curtails Congress’s ability to create independent agencies insulated from presidential control, the Court appears determined to preserve the Federal Reserve’s traditional independence, particularly with respect to monetary policy.
An Unresolved Tension
The juxtaposition of Slaughter and Cook creates an obvious tension.
On the one hand, the Court has embraced an expansive vision of Presidential control over executive officers and repudiated nearly a century of precedent supporting independent regulatory commissions. On the other hand, the Court has simultaneously carved out, or at least preserved, the possibility of a significant exception for the Federal Reserve.
Whether that exception ultimately extends only to monetary policy functions, or instead shields the Federal Reserve more broadly from presidential control, remains uncertain.
Looking Ahead
Trump v. Slaughter is likely to rank among the Supreme Court’s most important separation-of-powers decisions since Myers v. United States, 272 U.S. 52 (1926) (holding that a law requiring Senate approval before the President may remove executive branch officials is unconstitutional). The Slaughter decision fundamentally alters the constitutional foundation of modern administrative agencies and will almost certainly generate a new wave of litigation challenging removal protections throughout the federal government.
At the same time, Trump v. Cook demonstrates that at least a majority of the Court remains unwilling—for now—to subject the Federal Reserve to the same degree of Presidential control imposed on other regulatory agencies.
For the consumer financial services industry, these decisions could significantly affect regulatory priorities, enforcement strategies, and the future structure of federal financial regulation for years to come.