As we previously predicted, the Consumer Financial Protection Bureau (CFPB) has asked the Supreme Court to reverse the recent Fifth Circuit decision finding that the agency's funding is unconstitutional. In a petition for certiorari filed less than a month after the Fifth Circuit decision, the CFPB asks the Supreme Court to hear the case and decide it this term. The CFPB's petition argues that the Fifth Circuit's conclusion that the agency's funding violates the Appropriations Clause was wrong for numerous reasons. In the CFPB's words:
The court of appeals relied on an unprecedented and erroneous understanding of the Appropriations Clause to hold the CFPB's statutory funding mechanism unconstitutional. Congress enacted a statute explicitly authorizing the CFPB to use a specified amount of funds from a specified source for specified purposes. The Appropriations Clause requires nothing more. The court of appeals' novel and ill-defined limits on Congress's spending authority contradict the Constitution's text, historical practice, and this Court's precedent. And the court of appeals compounded its error by adopting a sweeping remedial approach that calls into question virtually every action the CFPB has taken in the 12 years since it was created.
As the last sentence suggests, in addition to arguing that the Fifth Circuit's Appropriations Clause analysis was erroneous, the CFPB argues that the Fifth Circuit's remedy analysis—which struck down the CFPB's Payday Lending Rule and suggested that all of the agency's actions were similarly subject to challenge—was also wrong.
Given the implications of the Fifth Circuit's ruling, we expect the Supreme Court to grant cert and decide the case this term—that is, by June 2023.
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe - Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2020. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.