In a letter to the Ninth Circuit Court of Appeals, the Consumer Financial Protection Bureau (“CFPB”) addressed the Fifth Circuit Court of Appeals opinion dated October 19, 2022, in which the Fifth Circuit ruled the CFPB’s funding mechanism is unconstitutional.
The CFPB’s letter came as a response to TransUnion’s Notice of Supplemental Authority where TransUnion is attempting to use the Fifth Circuit ruling as grounds for dismissal in an enforcement action brought by the CFPB. This litigation arose from an underlying 2017 consent order between the parties.
In the Fifth Circuit ruling, the CFPB’s payday lending rule was vacated because, “the funding employed by the Bureau to promulgate the Payday Lending Rule was wholly drawn through the agency’s unconstitutional funding scheme…” In this case, TransUnion uses the same argument; the consent order, which is the basis of the current litigation, was invalid “because the Bureau used unappropriated funds to negotiate and prepare it.”
In response, the CFPB takes the position that the Fifth Circuit ruling is unpersuasive. Rather, the CFPB contends that the Ninth Circuit should deny the remedy sought, and decline to follow the Fifth Circuit.
For more information, please click the following links below.
CFPB Responds to 5th Circuit’s Decision—But in a Different Case
CFPB lays out possible counter to Fifth Circuit funding decision