Federal Appeals Court Rules CFPB Funding is Unconstitutional

On October 19, A federal appeals court ruled that the funding structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional. A three-judge panel of the 5th U.S. Circuit Court of Appeals ruled that the design of the CFPB violated the Constitution because it receives funding through the Federal Reserve, rather than appropriations legislation passed by Congress. The case, originally brought by a payday lending group, also threw out the CFPB’s regulation on payday lenders. The CFPB has yet to comment as to whether it will file an appeal against the court’s decision.

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