Publication

A federal appeals court Wednesday ruled that the structure of the U.S. Consumer Financial Protection Bureau is constitutional, dealing a legal defeat to many Republicans and business groups that say the watchdog is too powerful.

The much-watched decision by the U.S. Court of Appeals for the District of Columbia Circuit said the bureau's leadership by a single director who can only be removed by the president for good cause did not violate legal boundaries.

Language in the Dodd-Frank Act that gives the Consumer Financial Protection Bureau’s (CFPB) independence from Congress is constitutional, the U.S. Court of Appeals for the District of Columbia Circuit ruled Wednesday, overturning a 2016 ruling by three of the court's judges.

In a review of the court’s previous decision, PHH v. CFPB, the full court held that the bureau can exist as an independent agency with a sole director who can only be fired by the president for “inefficiency, neglect of duty, or malfeasance.”

A federal appeals court ruled Wednesday the Consumer Financial Protection Bureau's single-director structure is constitutional, reversing an earlier federal decision that the Obama-era agency fell afoul of the separation of powers.

The full D.C. Circuit Court of Appeals ruled seven to three that the current structure of the agency, which allows for a single director who cannot be removed by the president except for cause, "is consistent with Article II" of the Constitution.

A duo of bills passed in the U.S. House of Representatives on Monday (Jan. 29) that would curb financial abuse of senior citizens and also ease the way for consumers residing in rural areas to open their bank accounts via remote means.

POWELL REACT ROUND-UP — You'll notice a theme... banking trades are very happy to have a deregulatory minded team at the Fed now with Powell and Vice Chair for Supervision Randy Quarles

ABA's Rob Nichols: "Chairman Powell has demonstrated his interest in reviewing and refining regulations to ensure they work to reinforce economic growth while preserving the important principles of prudential supervision. ... 

There is a major question mark hanging over the Consumer Financial Protection Bureau’s (CFPB) final rule regulating lenders specializing in short-term, small-dollar loans. 

Once thought by some to be a safe bet to be voided via the Congressional Review Act, the bureau’s recent announcement that it will reconsider its rulemaking pertaining to payday lending and similar businesses could present an opportunity for depository institutions hoping for regulations that support their own low-cost, short-term financing products. 

Payday lenders may have just been cut some major slack.

The Consumer Financial Protection Bureau, under new leadership, is now reconsidering an Obama-era rule designed to keep payday lenders from preying on vulnerable consumers.

The Consumer Financial Protection Bureau’s acting director, Mick Mulvaney, intensified his efforts this week to curb an agency he has denounced as a regulator run amok. His latest tactic: starve it of cash.

While a consumer advocate in a note to SubPrime Auto Finance News called the action “an insane development,” industry representatives cheered the request by the acting director of the Consumer Financial Protection Bureau for evidence of the regulator’s effectiveness.

Consumer advocates and business groups are battling anew over the possibility the Trump administration will eliminate a rule enacted to ensure that borrowers who take out high-interest loans between paychecks can pay them back.  

Clashing with support for a repeal by business groups, the policy arm of product tester Consumer Reports and other organizations say the so-called payday lending rule finalized last year by the U.S. Consumer Financial Protection Bureau should be fully implemented as soon as possible.