CFPB Guidance, Enforcement Hang in the Balance of US Supreme Court Appeal

Financial institutions across the country are carefully monitoring the Consumer Financial Protection Bureau's appeal to the U.S. Supreme Court as the fate of the agency's funding, guidance and enforcement actions hang in the balance.

In mid-November, the CFPB asked the nation's highest court to take its case regarding a ruling from a lower court that its funding structure is unconstitutional. If upheld, the decision of the U.S. Fifth Circuit Court of Appeals could wipe out the current mechanism by which the agency gets its appropriations through the Federal Reserve. It also could have the impact of invalidating all of the enforcement actions and guidance the CFPB has undertaken since its inception under the Dodd-Frank Act.

"It would call into question everything the agency has done in the past, as well as its ability to continue operating," John Coleman, a partner and financial services expert at law firm Buckley LLP, said in written comments.

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