From Barbara Mishkin at Ballard Spahr comes this update about the Court of Appeals for the Fifth Circuit agreeing to hear an interlocutory appeal whether the Bureau of Consumer Financial Protection is constitutional.
The CFPB had sued a payday lending company back in 2016 for engaging in abusive, deceptive, an unfair conduct. The company is now seeking the appeal after having a motion for judgment based on the pleadings denied by a District Court judge.
Citing the differences between the panel and the en banc Appeals Court rulings in PHH Mortgage v. CFPB, the District Court found that there was “substantial ground” for difference of opinion among the courts and certified the interlocutory review request.
What makes this interesting, Mishkin writes, is that it is “far from certain” that the agency will defend itself before the Appeals Court as to its constitutionality. Writes Mishkin:
Unlike previous cases involving challenges to the CFPB’s constitutionality (most notably, PHH), the Fifth Circuit case represents the first such challenge in which the CFPB’s position will be determined under the leadership of Acting Director Mick Mulvaney rather than former Director [Richard] Cordray. As a result (and particularly in light of statements by Mr. Mulvaney that legislative change is needed to ensure the CFPB Director answers to the President in the exercise of executive authority), it is far from certain that the CFPB will defend its constitutionality before the Fifth Circuit.
The CFPB did oppose the plaintiff’s petition to the Fifth Circuit for review of the case, but only argued that the case did not present a “controlling question of law,” which is required to have an interlocutory appeal heard.
