Fifth Circuit to Consider Constitutionality of the BCFP's Structure

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Fifth Circuit to Consider Constitutionality of the BCFP’s Structure

Fifth Circuit to Consider Constitutionality of the BCFP’s Structure

Cov Financial Services-

On July 2, 2018, All American Check Cashing, Inc., Mid-State Finance, Inc., and the president and owner of both companies (collectively, “All American”) filed a briefasking the U.S. Court of Appeals for the Fifth Circuit to find the Bureau of Consumer Financial Protection (“BCFP” or the “Bureau”) (formerly known as the CFPB) unconstitutionally structured and to strike down the Consumer Financial Protection Act (“CFPA”), which created the agency, in its entirety.

The appeal follows a 2016 complaint filed by the Bureau in the U.S. District Court for the Southern District of Mississippi against the two check cashing and payday loan companies and their principal for alleged unfair, deceptive, and abusive acts and practices. In that case, All American moved for a judgment on the pleadings on the basis that the BCFP is unconstitutionally structured as an independent agency with a single head whom the president can remove only “for cause.”

In March 2018, the district court denied the motion by adopting the reasoning of the U.S. Court of Appeals for the D.C. Circuit’s recent en banc majority decision upholding the Bureau’s structure in PHH Corp, et al. v. Consumer Financial Protection Bureau. (Our coverage of the PHH decision is available here.) All American moved to appeal the denial of the motion.

[COV FINANCIAL SERVICES]

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