The CFPB has filed its opposition brief in the interlocutory appeal of All American Check Cashing to the U.S. Court of Appeals for the Fifth Circuit from the district court’s ruling upholding the CFPB’s constitutionality.

All American Check Cashing and the other appellants sought the interlocutory appeal after the district court denied their motion for judgment on the pleadings in a lawsuit filed by the CFPB that alleges the appellants engaged in abusive, deceptive, and unfair conduct in connection with making certain payday loans, failing to refund overpayments on those loans, and cashing consumers’ checks.  Citing the D.C. Circuit’s en banc PHH decision, the district court rejected the defendants’ argument that the CFPB is unconstitutional based on its single-director-removable-only-for-cause structure.  It subsequently agreed to certify the constitutionality issue for interlocutory appeal to the Fifth Circuit which accepted the appeal.

In its brief, the CFPB makes the following principal arguments:

  • Because Acting Director Mulvaney is removable at will by the President and ratified the CFPB’s decision to bring the lawsuit against the appellants, any constitutional defect that may have existed with the CFPB’s initiation of the lawsuit was cured.  (The CFPB unsuccessfully attempted to use this argument in opposing the Fifth Circuit’s acceptance of the interlocutory appeal and in attempting to persuade Judge Preska that she need not rule on the CFPB’s constitutionality in the RD Legal Funding case.)
  • The CFPB’s structure is constitutional under existing U.S. Supreme Court precedent.
  • If the Fifth Circuit concludes that the CFPB’s structure is unconstitutional, the proper remedy is to strike the for-cause removal provision.

The appellants have been granted an extension of the time to file their reply brief until October 1.  Last month, they filed a petition asking the Fifth Circuit to hear their interlocutory appeal as an initial matter en banc and the petition remains pending.