Fifth Circuit Grants En Banc Request in CFPB Leadership Case

Not content to let the Supreme Court decide whether the leadership structure of the Consumer Financial Protection Bureau is constitutional, the Fifth Circuit Court of Appeals has granted a request from the defendant in a case to have an en banc hearing about the issue.

The Appeals Court published on Friday an announcement that its ruling from last month is to be vacated and that the entire cadre of judges from the Fifth Circuit will hear arguments in the case at a yet-to-be-announced date.

A three-judge panel from the Fifth Circuit last month followed other Appeals Courts in determining that there is nothing wrong with allowing the director of the agency to only be fired for cause. The defendant 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.

While the Fifth Circuit has decided to re-hear this case, the Supreme Court is deliberating about the same issue, having heard arguments in Seila Law v. CFPB. A ruling from the Supreme Court is expected by June.

The ultimate issue is whether the president should be able to fire the director of the CFPB for any reason, or only for cause. There are those who argue that allowing the director to only be fired for cause gives that individual too much power, while others argue that Congress intended for the director to only be allowed to be removed for cause and if that is going to be amended, it is Congress’s job to do so.

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