Supreme Court Sets Date to Hear Arguments in CFPB Constitutionality Case

Along with looking forward to a final debt collection rule in 2020, the accounts receivable management industry can now add another important date to their calendars.

The Supreme Court announced on Tuesday that it will hear arguments in Seila Law v. CFPB on Tuesday, March 3.

The case, which aims to answer the question — Whether the vesting of substantial executive authority in the CFPB, an independent agency led by a single director, violates the separation of powers — could have a significant impact on the ongoing supervision and oversight of the ARM industry as well as the release of a final debt collection rule. At least one law firm has stated that

Seila Law LLC is fighting against having to comply with a Civil Investigative Demand that it received from the CFPB in regards to possible violations of the Telemarketing Sales Rule while selling debt relief services to consumers. The CFPB issued a CID that Seila Law refused to answer, leading the CFPB to file a petition with a District Court, which sided with the regulator. Seila Law appealed that ruling to the Ninth Circuit, which also sided with the CFPB. Seila then appealed the ruling to the Supreme Court.

A number of Appeals Courts have ruled on the constitutionality of the CFPB’s leadership structure, including the D.C. Court of Appeals, which was where Justice Brett Kavanaugh was when it ruled on PHH v. CFPB. Kavanaugh was in the minority when the D.C. Court ruled the CFPB’s leadership structure was not unconstitutional.

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