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CFPB v. All American Check Cashing, Inc.

In this case, the Consumer Financial Protection Bureau (CFPB) brought an enforcement action against a payday lending company that the CFPB alleged had engaged in abusive lending practices. The defendants sought to have the case dismissed on the ground that the CFPB’s structure, with a single director protected against termination at will by the President, violates constitutional principles of separation of powers. The district court (Southern District of Mississippi) denied the motion, but later stayed the case and certified the order for appeal to the U.S. Court of Appeals for the Fifth Circuit, which accepted the appeal. Public Citizen, together with the Americans for Financial Reform Education Fund, Center for Responsible Lending, Consumer Federation of America, Consumers Union, National Association of Consumer Advocates, National Consumer Law Center, Tzedek DC, and U.S. Public Interest Research Group Education Fund, Inc., filed a brief as amici curiae explaining that Congress may protect the independence of regulatory agencies by protecting their heads against at-will removal by the President, and that the argument against the CFPB’s constitutionality distorts separation-of-powers principles in asserting that only multi-member commissions can receive such protection.

In March 2020, a Fifth Circuit panel decided the case in favor of our position, and the Fifth Circuit granted en banc rehearing in a sua sponte order. Following the Supreme Court’s decision in Seila Law v. CFPB, which held that the agency’s structure was not constitutional, the court received further briefing from the parties concerning the issue of ratification, and then decided to hold the case in abeyance pending the Supreme Court’s decision in Collins v. Mnuchin (2021), which presented related issues concerning the proper remedy for separation of powers violations.