Cmty Fin Assoc America v. CFPB, No. 21-50826 (5th Cir. 2022)
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in 2008, Congress passed the Consumer Financial Protection Act, which created the Consumer Financial Protection Bureau (CFPB) and transferred to the Bureau administrative and enforcement authority over 18 federal statutes which prior to the Act were overseen by seven different agencies. In 2016, then-Director of the CFPB proposed a rule to regulate payday, vehicle title, and certain high-cost installment loans (the “Payday Lending Rule”). The Rule's “Payment Provisions” limit a lender’s ability to obtain loan repayments via preauthorized account access.
Plaintiffs sued the Bureau seeking an order seeking to enjoin the enforcement of the Payday Lending Rule under the theory that it violates the separation of powers doctrine.
The Fifth Circuit reversed the district court's decision granting summary judgment to the CFPB in total, finding that Congress’s cession of its power of the purse to the Bureau violates the Appropriations Clause and the Constitution’s underlying structural separation of powers.
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