The Attorney General of West Virginia has become the first to publicly question how the Consumer Financial Protection Bureau will continue to operate following a ruling last week from the Court of Appeals for the Fifth Circuit, sending a letter to the director of the agency asking what plans it is making in order to comply with the ruling.
A copy of the letter, sent by Attorney General Patrick Morrisey to Rohit Chopra can be accessed by clicking here.
Based on the ruling, which determined that the funding structure of the CFPB is unconstitutional, “we cannot see how the Bureau intends to move on with its ‘business as usual’ attitude given that most of its operating funds derive from an unconstitutional funding scheme,” AG Morrisey writes in the letter, which was copied to the leadership of both the House Financial Services Committee and the Senate Banking Committee. The CFPB “plainly” cannot discharge its duties in a constitutionally permissible way, the letter alleges, noting that not only does the Bureau need to reassess its future plans, but also reevaluate whether present regulations have any effect, as well.
The letter requests answers to the following series of questions, no later than November 1. The questions are:
- Does the agency believe that any of the regulations that it promulgated under the unconstitutional funding scheme remain in effect? If so, which ones—and why? Similarly, how does the decision affect past enforcement actions?
- What plans does the Bureau plan to undertake to comply with the ruling? How will its ongoing enforcement efforts be effected? How will this change affect any promulgation of regulations? How will bank supervision continue, if at all?
“Unless Congress crafts a constitutional appropriations scheme, we see no other alternative but a substantial revision to the scope of the agency’s work,” according to the letter. “Only that reevaluation would spare everyone needless litigation about the validity (or lack thereof) of the agency’s efforts to constrain consumer financial markets.”