Sullivan & Cromwell Discusses D.C. Circuit Ruling Invalidating CFPB Structure

On October 11, 2016, a panel of the U.S. Court of Appeals for the D.C. Circuit held that the Consumer Financial Protection Bureau (the “CFPB”) is “unconstitutionally structured” because its authority is vested in a single appointee who can be removed by the President only for cause.  To remedy this constitutional flaw, the Court severed the unconstitutional “for-cause” provision in the legislation (Dodd-Frank) that created the CFPB.  “As a result, the CFPB now will operate as an executive agency.  The President of the United States now has the power to supervise and direct the Director of the CFPB, and may … Read more

Sullivan & Cromwell discusses CFPB Consideration of Rules to Restrict Certain Short-Term Lending

On March 26, 2015, the Consumer Financial Protection Bureau (the “CFPB” or the “Bureau”) announced that it will be considering rules imposing significant structural limitations and other requirements on payday and similar loans: (1) short-term (45 days or less) loans to consumers; and (2) longer-term (more than 45 days) high-interest rate personal loans (more than 36% measured by an “all in” annual percentage rate (APR) that is more inclusive than the Truth in Lending Act APR) where a lender has the right to collect from the customer’s paycheck or bank account, or where a non-purchase money loan is secured by … Read more