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New Legal Assaults on CFPB’s Constitutionality

Phil Hall
Oct 02, 2019
The Consumer Financial Protection Bureau has announced that it has taken measures to make it easier for consumers with urgent financial needs to obtain access to mortgage credit more quickly in the middle of the COVID-19 pandemic

The question of whether Consumer Financial Protection Bureau (CFPB) is unconstitutional in its structure and scope is being raised in the courts.
According to a Reuters report, the Mississippi payday lender All American Check Cashing filed a petition seeking a review by the U.S. Supreme Court of its constitutional challenge to the CFPB currently before the 5th U.S. Circuit Court of Appeals. The appeals court has yet to review the case, and All American Check Cashing is seeking a ruling that would strike down the provisions of the Dodd-Frank Act that that created the CFPB.
This court challenge follows the efforts by the California debt relief firm Seila Law, which filed a petition asking the Supreme Court to decide whether the CFPB’s structure is constitutional. Seila lost its case before the 9th Circuit, but on Sept. 17 the CFPB and the Department of Justice joined its cause by asking the high court justices to review Seila Law’s argument that the CFPB’s single-director structure was unconstitutional.
Also on Sept. 17, CFPB Director Kathleen Kraninger sent a letter to House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Mitch McConnell (R-KY) that she believed the leadership structure of the CFPB provided the director with too much independence.
“Mindful of the Bureau’s role as an Executive agency within the Executive Branch,” she wrote, “I have decided that the Bureau should adopt the Department of Justice’s view.”

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