United States Court of Appeals for the Second Circuitwhich includes districts in Connecticut, New York and Vermont, decided Thursday that funding provisions for consumer financial protection bureau (CFPB) are constitutional.
Thank you for reading this post, don't forget to subscribe!a case between the CFPB and Law Offices of Crystal Moroney – A law firm served with a Citizen Investigation Demand (CID) on possible legal violations by the CFPB in 2017 – The CFPB petitioned the court in 2020 to enforce its CID. However, the US Supreme Court case Cila Law LLC vs. CFPB It determined that the funding source for the bureau was unconstitutional while the petition was in process.
The law firm sought to invalidate the CID in appeal on the grounds that the Supreme Court’s judgment made it unenforceable. However, the Second Circuit didn’t see it that way.
“We believe that the CID was not zero [from the beginning] because the CFPB’s director was lawfully appointed, that the CFPB’s funding structure is not constitutionally unsound under either the Appropriations Clause or the non-representational doctrine, and that the CID awarded to Moroney is an unnecessarily burdensome administrative summons,” the Second Circuit said in its ruling.
In its decision, the Second Circuit stated that it declined to follow a Fifth Circuit Court of Appeals The decision – the basis of the case will be considered by the High Court later this year – assuming that it cannot find any basis in the Supreme Court for its decision and that the Constitution Bureau’s funding source has been declared unconstitutional by the Fifth Does not support the decision of the Circuit.
The Fifth Circuit ruling and law firm also held that in establishing the CFPB in 2010, Congress violated the “non-delegation principle,” which states that one branch of government cannot delegate that power to another entity. Should not authorize what is constitutionally authorized to avail benefits on its own. ,
“Under the liberal standard of the non-delegation doctrine, Congress has clearly provided a sensible principle to guide the CFPB in setting and spending its budget,” reads the Second Circuit ruling.
In February, the Supreme Court agreed to hear arguments in a case that will ultimately decide the constitutionality of the funding structure, which itself grew out of a Fifth Circuit decision that the Second Circuit has declined to follow.
While the Biden administration sought to expedite deliberations in the case, the Supreme Court declined to hear it before its next term begins in October. A final decision in the case is not expected until 2024.
