All Things FinReg


As we previously reported, a three-judge panel of the US Court of Appeals for the DC Circuit held in October 2016 that the Consumer Financial Protection Bureau (CFPB) was unconstitutionally structured in that too much authority is concentrated in its unitary director. In turn, the panel struck language in the Dodd-Frank Wall Street Reform and Consumer Protection Act that would only permit the US president to remove the CFPB director for cause—thereby permitting the president to remove the director without cause as he would any non-career “political” appointee.

The CFPB subsequently petitioned for en banc review; the court has granted that petition for review and ordered further briefing and a hearing before the full DC Circuit on May 24, 2017.

In the meantime, the October panel decision has been vacated, which means that (i) the CFPB will continue operating as it did before the October decision was filed and (ii) the CFPB director will continue, for the time being, to be removable only for “cause.”

We have discussed the implications of this case in depth (see our posts here, here, and here) in light of the recent change in the US presidential administration. It is, of course, too soon to predict the ultimate outcome of this matter or how the administration will react to this latest development.

We will continue to monitor this action closely and update our readers as new developments occur.