The Ongoing Battle Over the CFPB’s Constitutionality

Julius Loeser

On April 18, The National Law Journal  published an article entitled “Gibson Dunn’s Ted Olson Puts New Squeeze on Consumer Bureau,” updating the ongoing battle over the constitutionality of the CFPB’s structure in light of the President’s inability to remove the Director at will.  Recall that the D.C. Circuit U.S. Court of Appeals, sitting en banc, upheld the constitutionality of the CFPB’s structure, but reversed the imposition of a $109 million penalty that the CFPB had imposed on the plaintiff, PHH Corp.  While PHH might not appeal the decision to the Supreme Court, its lawyer, Ted Olson, now represents another target of the CFPB’s, All American Check Cashing.  Under former CFPB Director Cordray, the CFPB defended its constitutionality, but, now, under Acting Director Mulvaney, the CFPB is arguing that the issue is now moot because Acting Director Mulvaney has ratified the enforcement actions against All American and the President has the right to remove the Acting Director at will.  Mr. Olson has responded that the issue will recur as soon as Acting Director Mulvaney, whose term is limited by statute, steps down. The case is pending in the Fifth U.S. Circuit Court of Appeals.

Federalist Society’s Financial Services & E-Commerce Practice Group

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