Issues of CFPB constitutionality and structural deficiencies remain after the 2020 U.S. Supreme Court decision in Seila Law LLC v. Consumer Financial Protection Bureau, 140 S. Ct. 2183 (2020). In recent oral argument before the U.S. Court of Appeals, Fifth Circuit, counsel for All American Check Cashing and the CFPB argued broader contours of the agency’s structural issues: Whether the agency director defects (as identified in Seila) and/or the agency’s financial independence are constitutional defects that compel dismissal of the agency’s 2014 civil investigative demand. See Consumer Finance Protection Bureau v. All American Check Cashing, Inc., Case No. 18-60302, 953 F. 3d 381 (5th Cir. 2021).

In Seila, the CFPB acknowledged that the agency’s creation, pursuant to Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, now codified at 12 U.S.C. §5491, violated the separation of powers doctrine due to the director’s insulation from executive branch removal, except for cause. The Court ruled the unconstitutional director removal provision could be severed from the rest of the law, remanding for consideration of how the unconstitutional provision affected the agency’s enforcement action against Seila. On remand, the Ninth Circuit found that the Seila enforcement action had been validly ratified by the current director, which remedied any constitutional injury. See Consumer Finance Protection Bureau v. Seila Law LLC, 984 F. 3d 715 (9th Cir. 2020), as amended and superseded on denial of rehearing en banc, 997 F. 3d 837 (9th Cir. 2021).

In the Fifth Circuit case, the question presented — which was not decided by the Seila Court — was whether a final agency action should be set aside when done while the agency was unconstitutionally structured. Previously, the Fifth Circuit court had ruled the restrictions on presidential removal powers are valid and constitutional; see CFPB v. All American Check Cashing, Inc., 952 F. 3d 591 (5th Cir. 2020). After Seila, the court vacated its decision and set the case for rehearing en banc. At the January 19, 2022 rehearing en banc, All American argued ratification means there is no remedy for unconstitutional agency action. The court and the parties discussed the agency’s financial independence, and whether that constitutes a fatal constitutional defect. Concern was expressed for the agency’s broad authority over the American economy. All American argued the unconstitutional nature of the CFPB compels remand for dismissal of the CFPB civil investigative demand. The CFPB argued that any element of unconstitutionality did not affect the action against All American. The court queried, whether there is any remedy for an agency that is unconstitutionally structured. (Interested parties can listen to the January 19, 2022 oral argument at