Federal Court Rules Consumer Bureau Structure Unconstitutional

Source: The Hill

A federal district judge ruled Thursday that the structure of the Consumer Financial Protection Bureau (CFPB) violates the Constitution, countering a January ruling from a federal appeals court.

Judge Loretta Preska of the Southern District of New York ruled that the CFPB's creation as an independent agency with a director that could only be dismissed for wrongdoing was unconstitutional.

In January, the Court of Appeals for the District of Columbia Circuit ruled that the CFPB's structure was constitutional, reversing a 2016 verdict issued by a panel of the court's judges. The appeals court's initial opinion, written by Judge Brett Kavanaugh, sought to fix the issue by ruling that the CFPB director could be fired at will.

Preska, an appointee of former President George H.W. Bush, concurred with part of the D.C. appellate court's initial ruling against the CFPB, which held that the agency "is unconstitutionally structured because it is an independent agency that exercises substantial executive power and is headed by a single Director." MORE...

Read more: http://thehill.com/policy/finance/393510-federal-court-rules-consumer-bureau-structure-unconstitutional

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The CFPB was created by Dodd-Frank to crack down on predatory lending, enforce consumer protection laws and police the financial services industry against unfair, deceptive and abusive practices.
The bureau was designed and staffed primarily by Sen. Elizabeth Warren (D-Mass.) when she served as a special adviser to former President Obama before her 2012 election to the Senate. https://www.consumerfinance.gov/