Federal Judge Determines That The CFPB Is "Unconstitutionally Structured"

The U.S. District Court for the Southern District of New York ("S.D.N.Y.") dismissed Consumer Financial Protection Bureau ("CFPB") claims based on the determination that the CFPB "lacks the authority to bring [these] claims" because it is "unconstitutionally structured."

In the Opinion and Order, the S.D.N.Y. disagreed with the en banc holding of the D.C. Court of Appeals (the "Court of Appeals") in PHH Corp. v. CFPB, which upheld the CFPB's constitutionality under Title X of the Dodd-Frank Act. Judges Brett Kavanaugh and Karen LeCraft Henderson issued dissenting opinions in PHH Corp., which the S.D.N.Y. partially adopted in its decision. The S.D.N.Y. affirmed that, as stated in Judge Kavanaugh's Opinion, the CFPB "is unconstitutionally structured because it is an independent agency that exercises substantial executive power and is headed by a single Director." Furthermore, the S.D.N.Y. adopted Judge Henderson's dissenting opinion, which argued that the