Second Circuit Rules CFPB Funding Mechanism Is Constitutional, Deepening Split with Fifth Circuit

March 30, 2023

On March 23, the U.S. Court of Appeals for the Second Circuit ruled that the CFPB’s funding mechanism is constitutional.[1] The case, CFPB v. Law Offices of Crystal Moroney, is significant for two reasons. First, the Second Circuit expressly declined to follow the Fifth Circuit’s recent ruling in CFPB v. Community Financial Services Association of America that the CFPB’s funding mechanism violates the Appropriations Clause of Article I of the Constitution.[2] Second, the Second Circuit issued its ruling after the Supreme Court granted certiorari in Community Financial − weighing in on a controversial issue that the Supreme Court has already agreed to address.

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