Fifth Circuit Rules CFPB Leadership Structure is Constitutional

While the Supreme Court was hearing arguments yesterday about whether the leadership structure of the Consumer Financial Protection Bureau was constitutional or not, the Fifth Circuit Court of Appeals issued its own ruling on the topic, following other Appeals Courts in determining that there is nothing wrong with allowing the director of the agency to only be fired for cause.

A copy of the ruling in the case of CFPB v. All American Check Cashing can be accessed by clicking here.

The defendant had previously petitioned to have the Supreme Court hear arguments in its case while it was waiting for the Fifth Circuit to issue its ruling. It was sued by the CFPB back in 2016 for allegedly engaging in abusive, deceptive, and unfair conduct. The defendant has been fighting the lawsuit ever since.

The Court of Appeals for the District of Columbia in the case of PHH v. CFPB and the Court of Appeals for the Ninth Circuit in the case of CFPB v. Seila Law have each previously ruled that the leadership structure of the CFPB is constitutional. The Supreme Court heard arguments in the Seila Law case yesterday, and likely will once and for all issue a ruling that will bring an end to this argument.

“The structure of the CFPB is well within the constitutional lines drawn by the Supreme Court,” wrote Judge Patrick Higginbotham of the Fifth Circuit in yesterday’s ruling. “In the CFPA, Congress gave itself no removal authority. It only imposed a constraint on removal that the Supreme Court has twice read into otherwise silent statutes. And Congress left the decision to remove the CFPB Director to the President alone: Neither Congress nor any subordinate officer plays a role in the President’s exercise of his removal authority. This forecloses the challenge to the constitutionality of the CFPB.”

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