Independent Regulatory Agencies
Independent regulatory agencies occupy a distinctive position in the American constitutional structure. They exercise legislative, executive, and judicial functions — writing rules that carry the force of law, enforcing those rules, and adjudicating disputes — yet they operate with a degree of insulation from direct presidential control that sets them apart from ordinary executive branch agencies. This independence is achieved through structural features: multi-member bipartisan commissions, staggered terms that prevent any single president from appointing a majority immediately, and statutory protections against removal except for cause. The result is a category of federal agency that answers to Congress through its organic statute, to the courts through judicial review, and to the President only indirectly. This page examines the legal foundations of agency independence, the rulemaking process, and the major independent regulatory agencies.
What Makes an Agency Independent
The independence of regulatory agencies rests on several structural features that Congress has built into their enabling statutes. The most significant is removal protection. The heads of independent agencies typically may be removed by the President only for "inefficiency, neglect of duty, or malfeasance in office" — a for-cause standard that contrasts with the at-will removal power the President exercises over cabinet secretaries and other executive branch officials. The Supreme Court upheld this removal protection in Humphrey's Executor v. United States, 295 U.S. 602 (1935), holding that Congress could restrict the President's removal power over officers exercising quasi-legislative and quasi-judicial functions.
Additional structural features reinforce independence. Most independent regulatory agencies are headed by multi-member commissions rather than single administrators, which diffuses authority and prevents any one appointee from controlling the agency's direction. Commissioners serve fixed, staggered terms — typically five or seven years — that extend across presidential administrations, ensuring continuity and preventing a new president from replacing the entire commission at once. Bipartisanship requirements, which limit the number of commissioners from any single political party, further insulate the agencies from partisan control. The president designates the chair of most commissions, which provides some degree of executive influence over the agency's priorities, but the chair votes as one member among several.
Independent agencies also typically have independent litigating authority, meaning they can bring enforcement actions in their own name without the approval of the Department of Justice. This contrasts with most executive branch agencies, whose litigation is conducted or supervised by DOJ. Independent agencies generally submit their budget requests to Congress without revision by the Office of Management and Budget (OMB), another feature that reduces presidential leverage over their operations.
Rulemaking Authority and the Administrative Process
Independent regulatory agencies exercise rulemaking authority delegated by Congress through their organic statutes. This rulemaking power allows agencies to promulgate regulations that carry the force of law — binding on regulated parties and enforceable through civil and criminal penalties. The rulemaking process is governed by the Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., which establishes the procedures agencies must follow when creating rules.
The most common form of rulemaking is informal or "notice-and-comment" rulemaking under APA Section 553. The agency publishes a Notice of Proposed Rulemaking (NPRM) in the Federal Register describing the proposed rule and its legal and factual basis. The public is given an opportunity to submit written comments, which the agency must consider before issuing a final rule. The final rule must include a "concise general statement" of its basis and purpose, responding to significant comments and explaining the agency's reasoning. Final rules are subject to judicial review under APA Section 706, which authorizes courts to set aside agency action that is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."
Some independent agencies also exercise formal adjudicatory authority, conducting trial-type proceedings before administrative law judges (ALJs) to resolve disputes between the agency and regulated parties. The SEC, for example, can bring enforcement proceedings before its own ALJs, with the commission itself serving as the appellate body. This combination of prosecutorial and adjudicatory functions within a single agency has been criticized as inconsistent with due process, though courts have generally upheld it.
Securities and Exchange Commission (SEC)
The Securities and Exchange Commission was established by the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq., in response to the stock market crash of 1929 and the financial abuses revealed by the Senate's Pecora investigation. The SEC regulates the securities industry, stock and options exchanges, and electronic securities markets. It administers the federal securities laws, including the Securities Act of 1933 (governing the initial offering and sale of securities), the Securities Exchange Act of 1934 (governing secondary trading), the Investment Company Act of 1940, and the Investment Advisers Act of 1940.
The SEC is governed by five commissioners appointed by the President and confirmed by the Senate for staggered five-year terms. No more than three commissioners may belong to the same political party. The SEC's core functions include requiring public companies to disclose material financial information to investors; reviewing corporate filings; regulating broker-dealers, investment advisers, and mutual funds; overseeing self-regulatory organizations such as the Financial Industry Regulatory Authority (FINRA); and enforcing the securities laws through civil enforcement actions. The SEC can seek injunctions, disgorgement of ill-gotten gains, civil monetary penalties, and bars from serving as officers or directors of public companies.
Federal Communications Commission (FCC)
The Federal Communications Commission was created by the Communications Act of 1934, 47 U.S.C. 151 et seq., consolidating regulation of interstate and international communications that had previously been divided among several agencies. The FCC regulates interstate and international communications by radio, television, wire, satellite, and cable. Its jurisdiction encompasses broadcasting, telecommunications, and broadband, making it one of the most consequential regulatory agencies in the modern economy.
The FCC is governed by five commissioners appointed for five-year terms, with no more than three from the same party. The FCC's major regulatory activities include allocating spectrum for commercial, government, and public use; licensing broadcast stations; setting rules for media ownership; regulating telephone and broadband service; and enforcing rules against indecent content on broadcast media. The FCC's authority over broadband internet — and specifically the question of whether to classify broadband as a telecommunications service subject to common-carrier regulation under Title II of the Communications Act or as an information service subject to lighter regulation under Title I — has been one of the most contentious regulatory issues of the twenty-first century, with the agency's approach shifting between administrations.
Federal Trade Commission (FTC)
The Federal Trade Commission was established by the Federal Trade Commission Act of 1914, 15 U.S.C. 41 et seq., to prevent unfair methods of competition and unfair or deceptive acts or practices in commerce. The FTC shares antitrust enforcement authority with the Department of Justice's Antitrust Division and exercises broad consumer protection authority under Section 5 of the FTC Act, which prohibits "unfair or deceptive acts or practices in or affecting commerce."
The FTC is governed by five commissioners serving seven-year terms, with no more than three from the same party. The FTC's antitrust work includes reviewing mergers and acquisitions under the Hart-Scott-Rodino Act, 15 U.S.C. 18a, and challenging anticompetitive conduct under the Clayton Act and the FTC Act. Its consumer protection work encompasses advertising practices, financial fraud, data privacy and security, and identity theft. The FTC was the agency at issue in Humphrey's Executor, the foundational case establishing the constitutionality of for-cause removal protection for independent agency commissioners.
Consumer Financial Protection Bureau (CFPB)
The Consumer Financial Protection Bureau was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, 12 U.S.C. 5491 et seq., in response to the consumer financial abuses revealed by the 2008 financial crisis. The CFPB consolidated consumer financial protection authority that had been scattered across seven federal agencies into a single entity with comprehensive jurisdiction over consumer financial products and services, including mortgages, credit cards, student loans, and payday lending.
The CFPB occupies a unique position among independent agencies. It was originally headed by a single director, appointed by the President and confirmed by the Senate for a five-year term, who could be removed only for cause. In Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. 197 (2020), the Supreme Court held that this single-director structure with for-cause removal protection violated the separation of powers, distinguishing multi-member commissions (whose independence Humphrey's Executor had upheld) from agencies headed by a single individual. The Court severed the removal restriction, leaving the director removable at will by the President while keeping the rest of the CFPB's structure intact. The CFPB is also unusual in its funding mechanism: rather than relying on congressional appropriations, it receives funding directly from the Federal Reserve System, further insulating it from political leverage — a feature the Supreme Court upheld in Consumer Financial Protection Bureau v. Community Financial Services Association of America, 601 U.S. 416 (2024).
Nuclear Regulatory Commission (NRC)
The Nuclear Regulatory Commission was established by the Energy Reorganization Act of 1974, 42 U.S.C. 5841 et seq., which split the former Atomic Energy Commission's dual roles of promoting and regulating nuclear energy. The NRC inherited the regulatory functions, while promotion of nuclear energy was assigned to what became the Department of Energy. The NRC licenses and regulates the civilian use of nuclear materials, including nuclear power plants, research reactors, fuel cycle facilities, and the medical and industrial use of radioactive materials.
The NRC is governed by five commissioners appointed for staggered five-year terms, with no more than three from the same party. The NRC's regulatory authority encompasses reactor safety, radiation protection, nuclear materials security, and radioactive waste management. The agency conducts inspections of licensed facilities, takes enforcement action against violations, and conducts environmental reviews under the National Environmental Policy Act (NEPA), 42 U.S.C. 4321 et seq. The NRC's licensing process for new nuclear power plants is among the most rigorous and time-consuming regulatory proceedings in the federal government, reflecting the high stakes associated with nuclear safety.
Federal Energy Regulatory Commission (FERC)
The Federal Energy Regulatory Commission regulates the interstate transmission of electricity, natural gas, and oil. FERC was created as an independent regulatory commission within the Department of Energy by the Department of Energy Organization Act of 1977, 42 U.S.C. 7171 et seq., succeeding the Federal Power Commission. Despite its organizational placement within the DOE, FERC operates as an independent commission with its own decision-making authority — the Secretary of Energy has no power to direct FERC's regulatory decisions.
FERC is governed by five commissioners appointed for staggered five-year terms, with no more than three from the same party. FERC's major responsibilities include regulating rates and terms of service for interstate electricity transmission and wholesale electricity sales; regulating rates and terms of service for interstate natural gas transportation; licensing hydroelectric projects; overseeing the reliability of the high-voltage interstate transmission system through mandatory reliability standards developed by the North American Electric Reliability Corporation (NERC); and reviewing mergers and acquisitions of jurisdictional utilities. FERC does not regulate retail electricity or natural gas sales, which are under state jurisdiction, nor does it regulate nuclear power (which falls under the NRC) or oil and gas production on federal lands (which falls under the Department of the Interior).
Relationship to the President
The relationship between independent regulatory agencies and the President is defined by a tension between democratic accountability and regulatory independence. On one hand, the President is constitutionally responsible for the execution of federal law and is the only nationally elected official in the executive branch. On the other, Congress has determined that certain regulatory functions are better performed by agencies insulated from direct political control — agencies that can develop expertise, maintain consistency across administrations, and make decisions based on evidence and statutory criteria rather than electoral considerations.
Presidents exercise influence over independent agencies through several mechanisms despite the removal protections. The appointment power is the most significant: by selecting commissioners who share the administration's policy views, presidents can shape agency direction over time, albeit not immediately due to staggered terms. The president designates the chair of most commissions, and the chair typically sets the agenda and manages the agency's operations. Executive orders, while not binding on independent agencies in the same way they bind executive branch agencies, create political expectations and norms that independent agencies often accommodate. And the Office of Information and Regulatory Affairs (OIRA) within OMB reviews significant regulations, though independent agencies are generally exempt from the formal requirements of Executive Order 12866 and its successors.
The constitutional status of independent agencies remains actively contested. Some scholars and jurists argue that vesting regulatory authority in agencies insulated from presidential control violates Article II's vesting of "the executive Power" in the President. Others contend that the Constitution permits Congress to structure the executive branch as it sees fit, including by creating agencies with varying degrees of independence. The Supreme Court's decisions in Seila Law and Collins v. Yellen, 594 U.S. 220 (2021), have narrowed but not eliminated the constitutional space for agency independence, and further developments in this area of law are widely anticipated.
Congressional Oversight of Independent Agencies
While independent agencies are insulated from direct presidential control, they remain subject to robust congressional oversight. Congress created these agencies, defined their mandates, and can modify or repeal their enabling statutes. Congressional oversight mechanisms include authorization and appropriations hearings, at which agency leaders testify about their activities and budget requests; oversight hearings, at which congressional committees examine agency performance and policy decisions; and the Congressional Review Act (CRA), 5 U.S.C. 801 et seq., which allows Congress to disapprove and nullify agency rules through a joint resolution of disapproval.
Congress also exercises indirect control through the legislative process. By amending an agency's organic statute, Congress can expand or narrow the agency's jurisdiction, change its procedures, add or remove funding, or restructure its governance. The threat of legislative action — even when no bill is enacted — can influence agency behavior, as agencies seek to maintain productive relationships with the congressional committees that oversee them and control their appropriations.
The independence of regulatory agencies is thus not absolute but relative. These agencies are independent of the President in specific, legally defined ways, but they remain accountable to Congress through oversight, to the courts through judicial review, and to the public through the transparency requirements of the Administrative Procedure Act, the Freedom of Information Act (5 U.S.C. 552), and the Government in the Sunshine Act (5 U.S.C. 552b). Independence, in this context, means insulation from a particular kind of political control — not freedom from accountability.
Judicial Review of Agency Action
Independent regulatory agencies, like all federal agencies, are subject to judicial review of their actions under the Administrative Procedure Act. Section 706 of the APA authorizes courts to set aside agency action that is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"; that is "contrary to constitutional right, power, privilege, or immunity"; that exceeds "statutory jurisdiction, authority, or limitations"; or that is "without observance of procedure required by law." This standard of review — particularly the "arbitrary and capricious" standard — requires agencies to engage in reasoned decision-making, consider relevant factors, explain their reasoning, and respond to significant objections.
The degree of deference courts accord to agency interpretations of their governing statutes has been one of the most important and contested questions in administrative law. Under the framework established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984), courts deferred to reasonable agency interpretations of ambiguous statutory provisions. However, the Supreme Court's decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), overruled Chevron, holding that courts must exercise their own independent judgment in determining the meaning of statutory provisions. This shift has significant implications for independent regulatory agencies, whose rulemaking and enforcement actions depend on their interpretation of often broadly worded enabling statutes. Without Chevron deference, agencies face greater vulnerability to judicial second-guessing of their statutory interpretations, potentially constraining their regulatory flexibility.