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Second Circuit rules CFPB funding not unconstitutional

A three-judge panel of the U.S. Court of Appeals for the Second Circuit has unanimously ruled, in CFPB v. Law Offices of Crystal Moroney, that the CFPB’s funding structure does not violate the Appropriations Clause of the U.S. Constitution. The panel said in its decision it does not follow the Fifth Circuit panel decision in Community Financial Services Association of America Ltd. v. CFPB that reached the opposite conclusion.

The matter under contention in the Second Circuit case involved the CFPB's petition to enforce a civil investigative demand (CID) that the Bureau issued to Moroney before the Seila Law decision that eliminated the limitation on the President's ability to remove the CFPB Director only "for cause." The CID was ratified by then Director Kraninger after the Seila Law decision.

The Supreme Court may review the Second Circuit's ruling when taking up the Fifth Circuit's determination that the CFPB's funding mechanism does violate the Appropriations Clause of the Constitution.

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