Looks like the question of whether the Consumer Financial Protection Bureau’s (CFPB) structure is constitutional will be fought, if at all, on another day. On Monday, the U.S. Supreme Court denied the petition for writ of certiorari -- in other words, a request for the Supreme Court to hear the case -- in State National Bank of Big Spring, et al. v. Steven Mnuchin, et al.


As a brief refresher, the case presented two main constitutional questions regarding the structure of the CFPB:

  1. Whether an independent agency having a single director that is only removable by the President for cause and exempted from Congress’ power of the purse is constitutional; and
  2. Whether Congress was permitted “to create perpetual, on-demand funding streams for executive agencies that are unreviewably drawn from the coffers of other independent agencies.”

Justice Brett Kavanaugh, the newest member of the Supreme Court bench, did not participate in the vote. This is likely because he wrote the opinion for this case as well the dissenting opinion in the PHH v. CFPB case while he was still on the D.C. Circuit Court of Appeals bench prior to his Supreme Court appointment.

Four justices need to agree in order to hear a case, so the State National Bank case fell short of this.

insideARM Perspective

John Rossman, shareholder at Moss & Barnett and chair of the firm's creditor's remedies and bankruptcy practice group, shared the following insight with insideARM:

There are a variety of factors that weigh into the decision of the U.S Supreme Court granting or denying a petition for certiorari. In the State National Bank case, there were valid questions about whether Justice Kavanaugh would recuse himself due to his participation in the decision from the D.C. Circuit on this case where he authored the opinion. While the landscape at the CFPB has changed dramatically over the past few years – including the previous director, who was a Presidential recess appointment, stepping down and the new director obtaining Congressional approval – concerns about the constitutionality of this single director federal agency, and its funding mechanism, remain and need to be resolved. I expect a future challenge to the constitutionality of the CFPB may fare differently in a petition for cert to the U.S. Supreme Court.   

This follow-on request for the Supreme Court to hear the issue again may not be that far off. There is another case -- Consumer Financial Protection Bureau v. RD Legal Funding LLC, et al. -- percolating its way through the Second Circuit Court of Appeals. Depending on how far the parties in that case choose to go, the Supreme Court might see yet another petition for writ of certiorari on this very issue at at its front steps soon.


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Tags: CFPB