A federal judge in New York has ruled that the leadership structure of the Bureau of Consumer Financial Protection is unconstitutional, but denied a motion to dismiss because the New York Attorney General, who is a co-plaintiff in the case, has “alleged plausibility.”
The ruling, from Judge Loretta Preska of the District Court for the Southern District of New York, contradicts an Appeals Court ruling issued earlier this year that decided the leadership structure of the Bureau — a single director — is constitutional. The Appeals Court ruling was issued after the Bureau appealed a ruling from the same court that had originally said the leadership structure was unconstitutional.
The BCFP is helmed by a single individual, acting director Mick Mulvaney. Other federal agencies, such as the Federal Trade Commission and the Federal Communications Commission, are run by commissions comprised of five commissioners, including a chairman.
The ruling was issued in the case of Consumer Financial Protection Bureau and the People of the State of New York v. RD Legal Funding, RD Legal Finance, RD Legal Funding Partners, and Roni Dersovitz. A copy of the ruling can be accessed by clicking here. The suit was originally filed in February 2017, alleging that the defendants scammed first responders and former players in the National Football League out of millions of dollars “by luring them into costly advances on settlement payouts with lies about the terms of the deals.”
“Respectfully, the Court disagrees with the holding of the en banc court and instead adopts Sections I-IV of Judge Brett Kavanaugh’s dissent (joined by Senior Circuit Judge A. Raymond Randolph), where, based on considerations of history, liberty, and presidential authority, Judge Kavanaugh concluded that the CFPB “is unconstitutionally structured because it is an independent agency that exercises substantial executive power and is headed by a single Director,” Judge Preska wrote in her ruling.
The CFPB was removed as a party to the action, but the defendant’s motion to dismiss was denied and the case was allowed to continue with the New York Attorney General acting as the sole plaintiff moving forward.
The CFPB declined to comment on the ruling, according to a published report
