Joseph Reilly Discusses CFPB Constitutionality in American Banker

October 8, 2019

McGuireWoods senior counsel Joseph Reilly commented in an Oct. 1 American Banker article about potential litigation challenging the Consumer Financial Protection Bureau’s actions following CFPB Director Kathy Kraninger’s statement that the agency’s single-director structure is unconstitutional.

The article noted Kraninger’s comment that “litigation over this question has caused significant delays to some of [the CFPB’s] enforcement and regulatory actions.”

Reilly cautioned that “this is potentially much ado about nothing here,” but added Kraninger’s comments do create uncertainty in the interim.

Discussion also turned to CFPB v. PHH Corp., a 2018 D.C. Circuit en banc opinion in which then-Judge Brett Kavanaugh — now a justice on the U.S. Supreme Court — dissented. Kavanaugh noted that CFPB-related provisions under the Dodd-Frank Act would be largely unaffected by a decision to remedy the for-cause removal provision. Reilly said, “Part of Kavanaugh’s opinion explains that when agencies have been found to be structured unconstitutionally, the impact on pending matters has been relatively light.”

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