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The eyes of the consumer finance world are now on the Supreme Court as it decides whether to grant the CFPB’s certiorari petition in Consumer Financial Services Association Ltd. v. CFPB. In the decision, a Fifth Circuit panel held the CFPB’s funding mechanism violates the Appropriations Clause of the U.S. Constitution. In Part I, we focused on the legal arguments underlying the Fifth Circuit decision and potential outcomes. In Part II, we discuss the potential practical effects of a Supreme Court decision that holds the CFPB’s funding is unconstitutional on existing CFPB mortgage and other regulations and on pending and future CFPB enforcement actions. In particular, we consider how the current legal uncertainty might factor into the litigation strategy of companies that are the targets of CFPB enforcement activity as well as companies’ compliance strategy. We also consider the uncertainty’s impact on the CFPB’s ongoing operations and conclude with a discussion of how Congress might react if the Supreme Court holds that the CFPB’s funding is unconstitutional.
Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, moderates the discussion, joined by John Culhane, Richard Andreano, and Michael Gordon, partners in the Group.
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