The Consumer Financial Protection Bureau wants the Ninth Circuit Court of Appeals to think about the ramifications of what will happen if the Court chooses to ignore a pair of ratifications from the former Acting Director and current Director of the Bureau and rule in favor of a law firm trying to fight being forced to respond to a Civil Investigative Demand letter. Those ramifications could “raise doubts about the validity of other actions the Bureau has taken over the past decade” and call into question any enforcement action that the CFPB has taken during its decade of existence.
The CFPB filed a supplemental brief in its case against Seila Law, which was remanded back to the Ninth Circuit after the Supreme Court ruled in June that the leadership structure of the regulator was unconstitutional and that the Director should be able to be fired for any reason, not just for cause.
Seila Law was issued a Civil Investigative Demand by the CFPB seeking answers to seven interrogatories and four requests for documents. The law firm refused to provide the information, leading the CFPB to file a petition with a District Court, which sided with the regulator. Seila Law appealed that ruling to the Ninth Circuit, which also sided with the CFPB. Seila then appealed the ruling to the Supreme Court.
Now the case is back before the Ninth Circuit to determine whether Seila Law needs to comply with the CID.
In its brief, the CFPB argues that the ratifications of former Acting Director Mick Mulvaney and current Director Kathleen Kraninger, coupled with the Supreme Court’s ruling, are all that is needed for the Ninth Circuit to enforce the CID. Should it choose not to enforce the letter, the Ninth Circuit would not only delay a “legitimate law-enforcement investigation,” but “undermine the very Article II authority that the Supreme Court
sought to protect in this case.,” the CFPB argued in its brief.
Setting aside the CID, the CFPB wrote, could “be used to raise doubts about the validity of other actions the Bureau has taken over the past decade and that a fully accountable Director has now also ratified. These actions include, for example, regulations governing the nation’s multitrillion-dollar mortgage market.”
