The Consumer Financial Protection Bureau has survived many constitutional challenges since it was created by the Consumer Financial Protection Act, 12 U.S.C. §§ 5481, et seq. (the “Act”), in 2011. But on October 19, 2022, the CFPB suffered a setback in the wake of the Fifth Circuit’s decision in Community Financial Services Association of America, Ltd. v. CFPB, No. 21-50826, (5th Cir. 2022).
In a unanimous decision, the Fifth Circuit held that “Congress’s decision to abdicate its appropriations power under the Constitution, i.e., to cede its power of the purse to the Bureau, violates the Constitution’s structural separation of powers.”