Federal Judge Rules Against Consumer Financial Bureau Structure


A federal judge in New York said on Thursday that the US Consumer Protection Agency’s structure is against the Constitution and that the agency is not allowed to sue a company that pays money to people waiting for settlement payments.

US District Judge Loretta Preska’s decision contradicts a decision by the federal appeals court in Washington in January to endorse the structure of the CFPB.

Preska said that New York Attorney General Barbara Underwood, who participated in the CFPB filing for New Jersey-based RD Legal Funding LLC, may continue to follow the case.

The CFPB refused to comment on the decision. The Attorney General’s Office did not immediately respond to comments requests.

The CFPB, created to remove abusive loans, as part of the 2010 Dodd-Frank fiscal reform bill, has been the subject of political challenges since US President Donald Trump’s referral. The CFPB, under the leadership of Mick Mulvaney, who was appointed as the interim president of the agency in November, signed new regulations and filed a lawsuit against alacaires.

“We are delighted to see that the Court’s CFPB is structurally contrary to the constitution, which underlines the fact that the CFPB should never have the first thing to do with it,” says David Willingham, RD Legal Funding.

Court on Trump Consumer Fraud Structure, Business Complaints

Preska agreed with an opposing judge on the Washington case that he was led by a single director who found himself against the Constitution and was waiting for a five-year term of office and who could be kicked out by the president for just cause.

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In a statement earlier this month, the White House announced that Trump’s Executive and Budget Office officials will fulfill Mulvaney as head of the CFPB, Kathy Kraninger.

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