Consumer Financial Protection Bureau: Difference between revisions

In October 2016, the Court of Appeals for the District of Columbia Circuit ruled that it was unconstitutional for the CFPB director to be removable by the [[president of the United States]] only for cause, such as "inefficiency, neglect of duty or malfeasance."<ref name="Cowly2016">{{cite news|last1=Cowley|first1=Stacy|date=October 12, 2016|title=Court Upholds Consumer Agency, Minus Its Leader's Job Security|page=B2|work=The New York Times|url=https://www.nytimes.com/2016/10/12/business/dealbook/consumer-financial-protection-bureau-court-ruling-unconstitutional.html?_r=1|access-date=October 18, 2016}}</ref> Circuit Judge [[Brett Kavanaugh]], joined by Senior Circuit Judge [[A. Raymond Randolph]], wrote that the law was "a threat to individual liberty" and instead found that the president could remove the CFPB director at will.<ref name=Cowly2016/>  Circuit Judge [[Karen L. Henderson]] agreed that the CFPB Director had been wrong in adopting a new interpretation of the [[Real Estate Settlement Procedures Act]], finding the [[statute of limitations]] did not apply to the CFPB, and fining the petitioning mortgage company [[PHH Corporation]] $109 million, but she dissented from giving the president a new power to remove the director, citing [[constitutional avoidance]].<ref>{{cite news|last1=Frankel|first1=Alison|date=October 11, 2016|title=The D.C. Circuit's gratuitous ruling on CFPB constitutionality|work=[[Reuters]]|url=http://blogs.reuters.com/alison-frankel/2016/10/11/the-d-c-circuits-gratuitous-ruling-on-cfpb-constitutionality/|url-status=dead|access-date=October 18, 2016|archive-url=https://web.archive.org/web/20161015123334/http://blogs.reuters.com/alison-frankel/2016/10/11/the-d-c-circuits-gratuitous-ruling-on-cfpb-constitutionality/|archive-date=October 15, 2016}}</ref> The U.S. Court of Appeals for the District of Columbia Circuit vacated the decision and ordered ''[[en banc]]'' review.<ref>{{cite web|date=October 11, 2016|title=PHH Corporation v. CFPB, No. 15-1177 (D.C. Cir. 2017)|url=https://law.justia.com/cases/federal/appellate-courts/cadc/15-1177/15-1177-2017-02-16.html|access-date=November 27, 2017|website=Justia}}</ref> On January 31, 2018, the ''en banc'' D.C. Circuit found that the CFPB's structure was constitutional by a vote of 7–3. Judge [[Cornelia Pillard]], writing for the majority, found that the [[Take Care Clause]] does not forbid [[independent agencies of the United States government|independent agencies]], while each of the circuit judges from the earlier panel wrote separate dissents.<ref>{{cite news|last1=Weiss|first1=Debra Cassens|date=31 January 2018|title=Full DC Circuit upholds structure of Consumer Financial Protection Bureau|language=en|work=[[ABA Journal]]|url=http://www.abajournal.com/news/article/full_dc_circuit_upholds_structure_of_consumer_financial_protection_bureau|access-date=5 April 2018}}</ref>

In 2018, the [[Community Financial Services Association of America]] sued the CFPB over its 2017 rule that blocked lenders to attempt to collect funds from borrowers' accounts after two consecutive failed attempts, unless the borrower had consented. Part of its argument in the case was that the CFPB's budgetary structure was unconstitutional, as it did not receive funding through Congressional appropriations but requested its funding through the Federal Reserve. While the district court ruled against the association, the [[Fifth Circuit]] ruled in favor of the association in October 2022, deeming that its funding structure was unconstitutional.<ref>{{cite web | url = https://www.reuters.com/markets/us/us-consumer-protection-watchdogs-funding-unconstitutional-court-rules-2022-10-20/ | title = U.S. consumer protection watchdog's funding unconstitutional, court rules | first = Nate | last = Redmond |date = October 20, 2022 | accessdate = October 20, 2022 | work = [[Reuters]] }}</ref>