In the weeks since October 19, 2022, when the Fifth U.S. Circuit Court of Appeals ruled the Consumer Financial Protection Bureau’s funding mechanism unconstitutional, there has been a lot of discussion as to the next steps the CFPB may take. A shared opinion is a resolution to any uncertainty from this decision may be delayed.
Within the courts, the CFPB may decide to:
- Petition the Fifth Circuit for a rehearing en banc,
- Petition the U.S. Supreme Court for a writ of certiorari, or
- Seek a stay.
An en banc review is held before all the judges of a court or before the entire bench. In the Fifth Circuit, a majority of the circuit judges, who are in regular active service and not disqualified, may order an appeal or other proceeding be heard or reheard en banc. The en banc hearing will not be ordered unless the proceeding involved a question of exceptional importance, or the hearing is necessary to maintain consistency of the court’s decisions. A deadline to file a petition for panel rehearing is 45 days if one of the parties is a U.S. Agency, like the CFPB. This deadline can be extended upon motion. If a rehearing en banc is granted, the decision in Community Financial Services Association of America Ltd. v. CFPB (CFSA case) would be vacated.
A writ of certiorari is a decision by the U.S. Supreme Court to hear an appeal of a lower court decision, in this case the Fifth Circuit Court of Appeals. The cert petition shall be applied for within ninety days after entry of the judgment or decree. If a rehearing is not sought, the deadline would be 90 days from the circuit panel judgment. The time for applying for writ may be extended for a period not exceeding 60 days with good cause shown.
In either case, the CFPB may seek a stay of the mandate. The issuance of a mandate by the Fifth Circuit is automatically stayed until the end of the 45-day period in which the CFPB can file a petition for rehearing. If it does not file a petition or one is denied, then the CFPB may request a stay from the Fifth Circuit while the writ of certiorari is pending. If that request is denied by the Fifth Circuit, the CFPB can request a stay from the U.S. Supreme Court.
A potential preview of the CFPB’s arguments to challenge the Fifth Circuit’s decision are detailed in a response to a U.S. district court. Among other defenses, it states the CFSA panel’s treatment of the Appropriations Clause was incorrect. The CFPB has indicated it will continue business as normal. Given the passage of time since the decision, if the CFPB chooses to seek rehearing, an update post will be provided.
To view full details of Fifth Circuit appellate procedure and CFPB responses, please visit the links below.
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