Federal court rules CFPB structure unconstitutional

A federal district judge ruled Thursday that the structure of the Consumer Financial Protection Bureau (CFPB) violates the Constitution.

Judge Loretta Preska of the Southern District of New York ruled that the CFPB’s creation as an independent agency with a director that could only be dismissed for wrongdoing was unconstitutional.

She ruled that the entire section of the 2010 Dodd-Frank Act that established the CFPB should be stricken.

Preska did not issue an order to shut down the bureau.

Thursday’s ruling raises the likelihood that the Supreme Court will take up the issue of the CFPB’s constitutionality in an upcoming term.

The bureau was designed and staffed primarily by Sen. Elizabeth Warren(D-Mass.) when she served as a special adviser to former President Obama before her 2012 election to the Senate.

While Democrats have praised the CFPB’s aggressive oversight and regulation, Republicans and industry advocates accuse the bureau and Cordray, its first director, of abusing its power and independence.

READ MORE:  http://thehill.com/policy/finance/393510-federal-court-rules-consumer-bureau-structure-unconstitutional

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