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Fifith Circuit Finds CFPB Funding Structure Unconstitutional

American Banker

An appeals court ruled that the Consumer Financial Protection Bureau’s funding structure is unconstitutional, setting up another potential challenge to the agency before the Supreme Court.

Three judges on the U.S. Court of Appeals for the Fifth Circuit ruled in Community Financial Services Association of America v. CFPB on Wednesday that the CFPB’s funding structure violates the Constitution’s structural separation of powers. The three judges also invalidated part of the CFPB’s 2017 payday lending rule.

The CFPB is expected to appeal, and has two options for doing so. The agency can request a hearing before the full Fifth Circuit panel of judges, known as an en banc review, or it can submit a request to hear the case before the Supreme Court.