The eyes of the consumer finance world are now on the Supreme Court as it decides whether to grant the CFPB’s certiorari petition in Consumer Financial Services Association Ltd. v. CFPB. In the decision, a Fifth Circuit panel held the CFPB’s funding mechanism violates the Appropriations Clause of the U.S. Constitution. We first review the background of CFSA’s lawsuit, the mechanism through which the CFPB is funded, and Congress’s policy rationale for the mechanism. We then examine the reasoning behind the Fifth Circuit’s conclusion that the funding mechanism is unconstitutional, the CFPB’s strategy in response to the decision, and the issues CFSA is expected to raise in a cross-petition for certiorari. We conclude with Adam’s predictions on the outcome of the cert petitions, how SCOTUS is likely to rule if it grants the CFPB’s petition, potential remedies if SCOTUS rules the funding is unconstitutional, and the impact of such a ruling on pending and future litigation challenging CFPB actions.
Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion, joined by John Culhane, Richard Andreano, and Michael Gordon, partners in the Group.
To listen to Part I of the episode, click here.