The major headline grabber in the past week has been the decision by a three-judge panel for the U.S. Court of Appeals for the Fifth Circuit to find that the Consumer Financial Protection Bureau’s funding structure is unconstitutional.

As my colleague Rachel Rodman, a former senior counsel and enforcement attorney for the CFPB, wrote in a Bloomberg Law article published on Tuesday, “This ruling threatens to undo many, if not all, of the bureau’s past actions, and may make it impossible to perform its responsibilities under the Consumer Financial Protection Act.” And I might add, the ruling's logic seems to implicitly question the off-budget funding of the Fed, FDIC and OCC as well. You'll want to read the article, written by Rachel and associates Keith Gerver and Ken Bergman, in this week's newsletter.

Not to be outdone, crypto is in the news again. This time, in an important speech at the Brookings Institution, FDIC Acting Chair Martin Gruenberg emphasized the importance of disclosure and consumer protection in his examination of stablecoin oversight. My colleague Mercedes Tunstall and I take a closer look down below.

This issue also includes reprints of several timely and relevant articles: a Clients & Friends Memo on ESG ratings and two news items from our new Cadwalader Climate newsletter that we thought would be of interest to the financial services industry.  

Any comments or questions? Just drop me a note here.

Daniel Meade 
Editor, Cabinet News and Views

In Community Financial Services Association of America v. CFPB, a three-judge panel for the U.S. Court of Appeals for the Fifth Circuit became the first federal court to find that the Consumer Financial Protection Bureau’s funding structure is unconstitutional.

This ruling threatens to undo many, if not all, of the bureau’s past actions, and may make it impossible to perform its responsibilities under the Consumer Financial Protection Act. It also raises the possibility of future litigation against similarly funded agencies.

You can read our Bloomberg Law article here.

In a recent speech at the Brookings Institution, Martin Gruenberg, Acting Chair of the Federal Deposit Insurance Corporation, focused on three broad topics: (1) an overview of banking innovation and crypto assets, generally; (2) approach to prudential regulation of banks’ crypto-asset related activities; and (3) potential benefits, risks and policy questions related to stablecoins.

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The UK’s Advertising Standards Authority has ruled that two UK retail banking advertisements, which made claims about the financial institution’s green credentials, were “misleading” and “omitted material information.”

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South Pole, a Swiss carbon finance consultancy, has published a report which suggests that one in four companies around the globe have decided not to publicize details of their climate targets.

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Currently, ESG rating providers often greatly differ in both their methodology and approach. A variety of different sources of data, methodologies and formulae are utilized by providers when determining their ratings. This can lead to divergent rankings given to the same company by different ESG rating providers. Regulators in the U.S., UK, and EU recognize the issues caused by the current inconsistencies and are starting to develop rules in this area. Read our most recent Clients & Friends Memo here.