U.S. Court of Appeals for the Second Circuit Rules That the Funding Structure for the Consumer Financial Protection Bureau Is Constitutional
In this article, the authors review a decision by a federal circuit court of appeals upholding the constitutionality of the funding structure for the Consumer Financial Protection Bureau.
Entities regulated by the Consumer Financial Protection Bureau (CFPB), including banks, credit unions, payday lenders, mortgage servicers, debt collectors, and other financial services providers, should take note that the U.S. Court of Appeals for the Second Circuit (Second Circuit) has ruled that the CFPB’s funding structure does not violate the Appropriations Clause of the Constitution.
Further, CFPB-regulated entities should pay close attention to the Supreme Court of the United States’ forthcoming decision on the constitutionality of the CFPB’s funding structure.
If the CFPB’s funding structure is held to be unconstitutional, the CFPB’s future operations will be in jeopardy without action from Congress.
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“U.S. Court of Appeals for the Second Circuit Rules That the Funding Structure for the Consumer Financial Protection Bureau Is Constitutional,” by Diana M. Eng, Louise Bowes Marencik, and Jonathan K. Moore was published in the June 2023 edition of The Banking Law Journal (Vol. 140, No. 6), an A.S. Pratt Publication. Reprinted with permission.
This article was first published as a Blank Rome Financial Institutions Litigation and Regulatory Compliance alert in March 2023.