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In the latest development in the CFPB’s long-running lawsuit against RD Legal Funding, a New York federal district court judge denied RD Legal’s motion to dismiss and held that because the CFPB, under former Director Cordray’s leadership had the authority to initiate the lawsuit, ratification of the lawsuit by former Director Kraninger was unnecessary. … Continue Reading

On Monday, the first day of its new term, the U.S. Supreme Court denied the petition for a writ of certiorari filed by RD Legal Funding that asked the Court to decide whether the CFPB can ratify actions taken when it was unconstitutionally structured.

In its petition, RD Legal argued that the ratification of the CFPB’s enforcement action by former Director Kraninger was ineffective because, as an agent of the CFPB, she could not ratify an act that the CFPB, as principal, could not take at the time such act was done due to its unconstitutional structure. … Continue Reading

Following the U.S. Supreme Court’s decision last month in Collins v. Yellin (previously captioned Collins v. Mnuchin), controversy quickly erupted over the decision’s implications for the CFPB in three pending cases: All American Check Cashing and the two cases involving the CFPB’s 2017 final payday/auto title/high-rate installment loan rule (2017 Rule).… Continue Reading

In its decision earlier this week in Collins v. Yellin (previously captioned Collins v. Mnuchin), the U.S. Supreme Court, relying on its decision in Seila Law, held that the Federal Housing Finance Agency’s structure is unconstitutional because the Housing and Economic Recovery Act of 2008 only allows the President to remove the FHFA’s Director “for cause.” … Continue Reading

Less than one month after hearing oral argument in RD Legal Funding, the U.S. Court of Appeals for the Second Circuit has issued a summary order affirming the district court’s holding that the Dodd-Frank Act’s single-director-removable-only-for-cause provision is unconstitutional, reversing its holding that the provision is not severable, and remanding the case to the district court “to consider in the first instance the validity of Director Kraninger’s ratification of this enforcement action.”  … Continue Reading

This past Friday, the CFPB filed a declaration with the Fifth Circuit in which Director Kraninger stated that she has ratified the Bureau’s enforcement action against All American Check Cashing.

On July 10, the CFPB filed a similar declaration with the Second Circuit in RD Legal Funding, another circuit court case involving a challenge to the Bureau’s constitutionality that was put “on hold” pending the Supreme Court’s decision in Seila Law. … Continue Reading

With the U.S. Supreme Court having ruled in Seila Law that the CFPB’s leadership structure is unconstitutional, two circuit court cases involving the same constitutional challenge that were “on hold” pending the Supreme Court’s decision will now be moving forward.  The two cases are RD Legal Funding pending in the Second Circuit and All American Check Cashing pending in the Fifth Circuit.… Continue Reading

In CFPB and People of the State of New York v. RD Legal, the CFPB and NYAG appealed to the Second Circuit from the district court’s decision holding the CFPB’s structure is unconstitutional and striking all of Title 10 of Dodd-Frank.  Yesterday, the Second Circuit entered an order adjourning the oral argument that was set for November 21, 2019. … Continue Reading

As expected, the U.S. Supreme Court’s grant of Seila Law’s cert petition is impacting other cases in which the CFPB’s constitutionality has also been challenged.  

In CFPB v. CashCall, CashCall appealed to the Ninth Circuit from the district court’s decision ordering CashCall to pay a $10 million statutory fine based on its finding that it was the “true lender” of loans issued to borrowers in 16 states. … Continue Reading