In a ruling that reshapes the leadership structure of the Federal Trade Commission (FTC)—the agency whose rules and enforcement actions most directly shape independent dealers’ day-to-day compliance obligations—the United States Supreme Court on June 29, 2026 significantly expanded the President’s authority over independent federal agencies by holding that the President may remove FTC members at will. In a 6-3 decision, the Court struck down the limitation on the President’s ability to remove FTC commissioners except for “inefficiency, neglect of duty, or malfeasance in office,” concluding that the restriction violated the Constitution’s separation of powers by unduly limiting the President’s executive authority.
In reaching its decision, the Court overruled its 91-year-old precedent in Humphrey’s Executor v. United States, which had long served as the constitutional foundation for congressional efforts to insulate certain independent agencies from direct presidential control. Established more than a century ago, the FTC is governed by five commissioners, no more than three of whom may belong to the same political party. Commissioners are nominated by the President, confirmed by the Senate, and appointed to staggered seven-year terms, a structure intended to promote continuity and bipartisan oversight.
Although the case focused specifically on the FTC, the Court’s decision has far-reaching implications for roughly two dozen other multi-member independent federal agencies whose leadership has historically enjoyed statutory protection from at will removal. Going forward, members of these agencies will generally serve at the pleasure of the President, regardless of the political party in power. As a result, future administrations will have significantly greater authority to reshape the leadership and policy direction of independent regulatory agencies, substantially diminishing the bipartisan independence that Congress sought to preserve when creating many of these entities. Notably, the Court excepted the Federal Reserve from its ruling, opting to retain Fed officials’ statutory “for-cause” protections, citing to the Fed’s unique mission and mandate.
