Although Congress created the Consumer Financial Protection Bureau (“CFPB”) nearly a decade ago, constitutional challenges to its leadership structure remain ongoing.  Until recently, only the D.C. Circuit had ruled on the constitutionality of the CFPB structure at the appellate level in PHH Corp. v. CFPB, 881 F.3d 75 (D.C. Cir. 2018) (en banc), and

On July 6, 2018, Leandra English, through her attorney via Twitter, announced she would be resigning from the Consumer Financial Protection Bureau (“CFPB”). In so doing, Ms. English is also dropping her lawsuit against the CFPB in which she challenged Mick Mulvaney’s status as the acting director and claimed that she was the true

On June 21, 2018, in deciding a motion to dismiss a complaint brought the Consumer Financial Protection Bureau (“CFPB”)and the State of New York, Judge Loretta Preska of the U.S. District Court for the Southern District of New York held that the CFPB’s structure is unconstitutional.

Previously the D.C. Circuit, sitting en banc in PHH Corp. v. CFPB, 881 F.3d 75 (D.C. Cir. 2018), had held that Title X of the Dodd-Frank Act, which “established the CFPB as an ‘independent bureau’ within the Federal Reserve System,” was validly enacted. Judge Preska disagreed with the panel and adopted the minority view proposed by the dissent in that case. First, she accepted Judge Brett Kavanaugh’s conclusion that the CFPB was unconstitutionally structured because it is an “independent agency that exercises substantial executive power and is headed by a single Director.” Namely, Judge Kavanaugh took issue with the CFPB’s unchecked authority vested in a single director, where history, liberty, and presidential authority dictate otherwise.
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The battle for control of the Consumer Financial Protection Bureau (“CFPB”) raged on this Thursday during oral argument before the United States Court of Appeals for the District of Columbia Circuit in English v. Trump. All three panel judges seemed skeptical of English’s claim that she should be acting director of the CFPB, but two judges questioned whether President Trump could appoint Mulvaney as acting director when a provision in the Dodd-Frank Act states that a subsection on budgeting and financial management “may not be construed as implying … any jurisdiction or oversight over the affairs or operations of the [CFPB]” by the Office of Management and Budget (“OMB”). 
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Seyfarth Synopsis: One court upholds protection of Dodd-Frank limiting the President’s removal authority, while another court stifles a challenge against Mulvaney serving as acting Director of CFPB.

Last week, the Trump Administration experienced mixed results in the ongoing litigation over the Consumer Financial Protection Bureau (“CFPB”). As we’ve mentioned in our prior publications, there are several actions pending that involve the President’s authority to control the CFPB. The first action discussed below, which had been languishing in the court for some time, raised the issue of whether the CFPB’s structure as an independent agency is constitutional. The Trump Administration lost on this issue for the moment. In the second action, the Trump Administration dodged, at least temporarily, a challenge to President Trump’s appointment of current CFPB Director Mick Mulvaney because the court determined that the plaintiff, a non-profit credit union, had no standing to bring its case.
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On January 23, 2018, the Consumer Financial Protection Bureau’s (“CFPB”) Acting Director, Mick Mulvaney, issued a mission statement to the CFPB redirecting the agency’s mission and focus. Mulvaney emphasized that the law mandates the enforcement of consumer protection laws and that, although things would be different under new leadership, the CFPB will continue to fulfill its mandate.

Mulvaney made clear that he did not see the CFPB as the “good guys” out to fight the “bad guys,” but instead he noted that the agency would treat both consumers and financial services companies fairly and equally. To that end, the CFPB will focus its enforcement efforts on quantifiable and unavoidable harm to the consumer. Where no such harm exists, the agency will not go looking for excuses to bring lawsuits.
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Seyfarth Synopsis: A federal judge on Wednesday denied a request to remove Mick Mulvaney as the CFPB’s acting director, finding that the President has authority to appoint the acting director despite former CFPB Director Cordray’s attempt to handpick his successor.

On January 10, 2018, Judge Timothy Kelly of the U.S. District Court for the District

Today the Senate struck down a new Consumer Financial Protection Bureau (“CFPB”) rule which would have prohibited providers of financial products and services from including class action waivers in their arbitration agreements with consumers. The action is a win for the financial services industry.

Background

Way back in March 2015 we blogged about the CFPB’s