CFPB structure challenged in Supreme Court petition filed by payday lender

Payday lender, All American Check Cashing, is asking the Supreme Court to decide whether the structure of the Consumer Financial Protection Bureau, Massachusetts Sen. Elizabeth Warren’s brainchild, is unconstitutional and how the alleged separation-of-powers violation should be judicially redressed.

All American is arguing that the agency’s structure is unconstitutional, based on how its director can be removed, as well as “other anomalous features of the agency.” All American, of Mississippi, asked the U.S. Supreme Court to take up the case even though an appeals court has yet to review it.

The agency’s director cannot be fired at will by the president, like the heads of other bureaucratic agencies. Instead, the director can only be fired for cause. Some argue this set up is unconstitutional because the director, is not responsive to the president or Congress.

If the court deems the structure of the agency is, in fact, unconstitutional, All American is asking it to then identify the proper judicial remedy to redress the violation.

That means potentially undoing enforcement actions it has taken, because “actions taken by unconstitutionally structured agencies are nullities,” the petitioners argue. Actions could, however, be potentially ratified by a constitutionally-appointed director.

While there are other challenges to the agency’s structure awaiting review, Gibson Dunn partner Helgi Walker, a lawyer for All American Checking Cashing, noted that their case is the ideal candidate because it asks “the absolutely essential question” of what an unconstitutionally-structured CFPB means as a “practical matter.”

“What good does it do for a litigant to ‘win’ on the constitutional question if the government action against him simply goes on as if the constitutional violation never happened, as some lower courts have held?” Walker said in a statement. “That is where the constitutional rubber hits the road, and if it is not addressed the current uncertainty about what should actually happen in cases involving the CFPB will only grow.”

A spokesperson for the CFPB did not immediately return FOX Business’ request for comment.


Republicans have also been critical of the CFPB’s structure, including the parameters governing the director, as well as the fact that the agency is funded by the Federal Reserve – and not Congress like most federal agencies. Its annual budget cap, therefore, cannot be affected by lawmakers through appropriations.

Current director of the CFPB, Kathy Kraninger, who was appointed by President Trump, last month told lawmakers that she a legal effort asking the Supreme Court to review the constitutionality of her own power.


The CFPB brought regulatory actions against All American on grounds that it engaged in unfair, deceptive and abusive practices.