Editor's Note: This article, authored by Richard J. Andreano, Jr., John L. Culhane, Jr., Michael Gordon & Alan S. Kaplinsky of Ballard Spahr, previously appeared on Ballard Spahr’s Consumer Finance Monitor and is re-published here with permission

A three-judge panel of the U.S. Court of Appeals for the Second Circuit has unanimously ruled that the CFPB’s funding structure does not violate the Appropriations Clause of the U.S. Constitution. In its decision, the panel expressly declined to follow the Fifth Circuit panel decision in Community Financial Services Association of America Ltd. v. CFPB that reached the opposite conclusion. Last month, the U.S. Supreme Court granted the CFPB’s certiorari petition seeking review of the Fifth Circuit decision and agreed to hear the case next Term.

In CFPB v. Law Offices of Crystal Moroney, the federal district court granted the CFPB’s petition to enforce a civil investigative demand (CID) that it issued to Moroney prior to the U.S. Supreme Court’s decision in Seila Law holding that the limitation on the President’s ability to remove the CFPB Director only “for cause” was unconstitutional. After that decision, then CFPB Director Kraninger ratified the issuance of the CID.

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