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Challenging the Constitutionality of the Consumer Financial Protection Bureau

Our constitutional challenge to the Consumer Financial Protection Bureau (CFPB) is once again on hold, but this time the delay may be relatively short. On July 12, U.S. District Court Judge Ellen Huvelle issued a partial summary judgment against us on a secondary issue in the case—the question of whether CFPB Director Richard Cordray, whose original recess appointment was invalid, could summarily ratify his past actions after he’d been properly reappointed. But the judge left our major constitutional claims regarding the CFPB’s structure undecided pending an appellate ruling in another case. And hopefully, a decision in that case won’t be long in coming.

The case, PHH Corp. v. CFPB, was heard by a D.C. Circuit panel on April 12. The original focus of the case was on due process and administrative law issues. But shortly before the hearing, the panel ordered the parties to be prepared to also address the constitutional issues raised by the CFPB’s structure. CEI had filed an amicus on these issues---namely, whether the CFPB’s very structure is valid, given its unprecedented lack of oversight by the President, by Congress, and by the courts.

If the panel rules on those issues in deciding PHH, it may well determine the outcome of our case as well. If not, those questions will be squarely before Judge Huvelle.