A pair of organizations have filed amicus briefs in support of a company being sued by the Consumer Financial Protection Bureau, arguing that a ratification by the regulator is not enough to allow the case to continue.
Briefs were filed late last week by the Cato Institute and the Pacific Legal Foundation, supporting All-American Check Cashing’s fight against a lawsuit filed against it by the CFPB back in 2016. The CFPB sued the lender for allegedly engaging in abusive, deceptive, and unfair conduct. The lender has been fighting the lawsuit ever since. An en banc panel from the Fifth Circuit Court of Appeals will hear arguments in the case in September. A three-judge panel from the Fifth Circuit in March upheld a lower court’s ruling that sided with the CFPB. All American Check Cashing had also petitioned the Supreme Court to hear its case, but that petition was denied.
Following the Supreme Court’s ruling in Seila Law v. CFPB, which ruled that the leadership structure of the agency was unconstitutional and the director should be able to be fired for any reason, not just for cause, the regulator has been submitting ratifications from Director Kathleen Kraninger, declaring that any regulatory actions taken prior to the ruling from the Supreme Court remain valid.
But Cato and the Pacific Legal Foundation filed briefs disagreeing with that delcaration.
“…it is difficult to conceive of any set of facts where a post-hoc ratification could retroactively legitimize an enforcement action undertaken by an agency that was unconstitutionally insulated from presidential control at the time the action was initiated,” the Cato Institute wrote in its brief. “If at the time an enforcement action was initiated, the agency was unconstitutionally structured, then nothing the agency did could have rendered that action constitutional.”
