CFPB Touts Recent Ruling to Ward Off Constitutional Challenges
As its independent, single-director design continues to come under attack, the Consumer Financial Protection Bureau (CFPB) this week trumpeted a judge's recent refusal to toss the agency's allegations that student loan servicer Navient Corp. mishandled payments and its communications with borrowers.
August 11, 2017 at 11:16 PM
4 minute read
As its independent, single-director design continues to come under attack, the Consumer Financial Protection Bureau (CFPB) this week trumpeted a judge's recent refusal to toss the agency's allegations that student loan servicer Navient Corp. mishandled payments and its communications with borrowers.
A federal judge in Scranton, Pennsylvania, last week denied Navient's motion to dismiss the CFPB lawsuit, in which the company contested the constitutionality of the bureau's structure. The judge, Robert D. Mariani of the U.S. District Court for the Middle District of Pennsylvania, rejected arguments that the CFPB's leadership structure—combined with an independent funding stream that does not subject it to congressional appropriations—violates the Constitution.
The CFPB's single-director design, “in and of itself, does not offend the Constitution,” Mariani wrote, pointing out that the Office of Special Counsel, Federal Housing Finance Agency and Social Security Administration have comparable leadership structures.
The CFPB made sure Wednesday that Mariani's decision would not go unnoticed in Minnesota and Manhattan, where it's facing similar motions to dismiss.
In the U.S. District Court for the Southern District of New York, the CFPB joined with New York Attorney General Eric Schneiderman's office to notify Judge Loretta Preska of Mariani's ruling. Preska is presiding over the CFPB and the New York attorney general's case against RD Legal Funding, a company accused of scamming 9/11 first responders and National Football League concussion victims out of millions of dollars by luring them into costly advances on settlement payouts.
RD Legal Funding—represented by a team from Boies Schiller Flexner and Calgagni & Kanefksy—has argued the case should be dismissed, in part, because the “CFPB's unprecedented structure violates fundamental constitutional principles of separation of powers.”
In Minnesota federal court, the CFPB highlighted Mariani's ruling in its fight against TCF National Bank's bid to shake allegations it tricked consumers into costly overdraft services. Judge Richard Kyle held a hearing in June on the bank's motion to dismiss.
TCF National Bank—represented by a defense team from BuckleySandler, Williams & Connolly and Dykema Gossett—and RD Legal Funding are among several companies in the CFPB's crosshairs that have seized upon a Washington federal appeals court panel decision last year that struck down the agency's structure as unconstitutional. The divided panel's ruling was vacated when the U.S. Court of Appeals for the D.C. Circuit agreed to hear the case, PHH v. CFPB, en banc.
The D.C. Circuit held oral arguments in May and is expected to hand down a decision in the fall.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllCalifornia Implements New Law Banning Medical Debt From Credit Reports
Philadelphia District Attorney Alleges Elon Musk's Voter Sweepstakes Is an Illegal Lottery
3 minute readSixth Circuit: Consumer's FCRA Complaint Regarding Inaccurate Spousal Support Obligation Passes Muster
Trending Stories
- 1Gibson Dunn Sued By Crypto Client After Lateral Hire Causes Conflict of Interest
- 2Trump's Solicitor General Expected to 'Flip' Prelogar's Positions at Supreme Court
- 3Pharmacy Lawyers See Promise in NY Regulator's Curbs on PBM Industry
- 4Outgoing USPTO Director Kathi Vidal: ‘We All Want the Country to Be in a Better Place’
- 5Supreme Court Will Review Constitutionality Of FCC's Universal Service Fund
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250