On May 6, 2019, the 9th Circuit concluded that the CFPB is constitutionally structured. In CFPB v. Seila Law LLC
, Seila Law argued that the CFPB’s structure violates the Constitution’s separation of powers doctrine because it is headed by a director who exercises substantial executive power but can only be removed by the President for cause. Relying on two Supreme Court decisions, the 9th Circuit stated that those cases “indicate that the for-cause removal restriction protecting the CFPB’s Director does not ‘impede the President’s ability to perform his constitutional duty’ to ensure that the laws are faithfully executed.” The 9th Circuit further noted that “the Supreme Court is of course free to revisit those precedents, but we are not.”
DWT will continue to monitor other cases challenging the CFPB’s constitutionality. At present, appeals involving the constitutionality of the CFPB are also being considered by two other circuits. On March 12, 2019, the 5th Circuit heard oral arguments from the CFPB and All American Check Cashing in connection with a Mississippi district court’s ruling that confirmed the constitutionality of the CFPB’s structure. Additionally, a recent decision by a New York federal district court holding the Bureau’s for-cause removal structure unconstitutional is currently pending before the 2nd Circuit. This matter is currently in the briefing stage.