Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.
CFPB constitutional case overview:
- Who: The 2nd Circuit has voted 3-0 that the funding arrangement for the Consumer Financial Protection Bureau does not violate the constitution, ruling against a challenge brought by debt-collection firm the Law Offices of Crystal Moroney PC.
- Why: The debt collection firm challenged the funding for the CFPB in an attempt to get out of complying with an investigative demand the agency has made against it.
- Where: The case is in the United States Circuit Court of Appeals for the 2nd Circuit.
The 2nd Circuit ruled last week in a unanimous 3-0 decision that the payment structure for the Consumer Financial Protection Bureau (CFPB) is constitutional.
The appeals court’s decision upholds the enforcement of an investigative demand that the CFPB has made against debt collection firm the Law Offices of Crystal Moroney PC, Law360 reports.
The Law Offices of Crystal Moroney must now comply with the agency’s demand to hand over documents and other data related to an investigation into the firm’s debt collection practices.
While fighting against the demand, the debt collection firm had, among other things, argued that the way the CFPB is funded is unconstitutional, Law360 reports.
The CFPB is funded by the Federal Reserve instead of annual spending bills. The 5th Circuit ruled last year that the funding arrangement violates the Constitution’s Appropriation Clause, Law360 reports.
U.S. Supreme Court set to review constitutionality of CFPB funding
The clause requires that all federal spending must be appropriated by Congress; however, the U.S. Supreme Court is set to review the 5th Circuit’s decision during its next term.
For the time being, the 2nd Circuit said it “cannot find any support for the Fifth Circuit’s conclusion in Supreme Court precedent,” nor in the text of the Constitution or “in the history of the Appropriations Clause.”
“Because the CFPB’s funding structure was authorized by Congress and bound by specific statutory provisions, we find that the CFPB’s funding structure does not offend the Appropriations Clause,” the 2nd Circuit said.
Last month, the CFPB proposed a new rule the agency said is meant to clamp down on financial institutions charging consumers excessive credit card late fees.
Do you agree with the Second Circuit’s decision? Let us know in the comments!
The CFPB constitutional case is Consumer Financial Protection Bureau v. Law Offices of Crystal Moroney PC, Case No. 20-3471, in the United States Court of Appeals for the 2nd Circuit.
Don’t Miss Out!
Check out our list of Class Action Lawsuits and Class Action Settlements you may qualify to join!
Read About More Class Action Lawsuits & Class Action Settlements:
17 thoughts onCourt rules CFPB funding constitutional, upholds enforcement demand against debt collector
Please add me, would love to learn more about it to see if I qualify for this.
Add me
Yes I agree credit card companies and those who sponsored if you join a credit monitoring service which themselves have been found guilty many times, they push and push cards on people with # of stars or percenage at a persons chances. Destroyed me
Yes I agree with the court of law
I love the 2nd Circuit’s ruling, moments like this make me feel so proud to be an American. God bless, The United States of America, The Constitution of the United States, The Courts and The Rule of Law.
I love the 2nd Circuit’s ruling, moments like this make feel so proud to be an American. God bless, The United States of America, The Constitution of the United States, The Courts and The Rule of Law.
Would love more info
That’s a big 10-4
Def need more info on this
Would love this info, it would help me out a lot