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D.C. Circuit Rules that CFPB Is Constitutional

On January 31, 2018, the full panel for the United States Court of Appeals for the District of Columbia Circuit upheld as constitutional the structure for the appointment of a Director of the Consumer Financial Protection Bureau (“CFPB”) – reversing the Court’s prior October 2016 decision to the contrary. 

The CFPB was created in 2010, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Congress provided that the President would appoint a single director, to be confirmed by the Senate, to serve a five-year term – with the potential to hold over, pending the confirmation of a successor Director.  The D.C. Circuit found that there was “nothing constitutionally suspect” regarding the leadership structure of the CFPB, and that the Director was protected by the for-cause removal standard of “inefficiency, neglect of duty, or malfeasance in office.”

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