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Case Dismissed as CFPB Ruled Unconstitutional

Written by Steve Rhode

Well here is a little piece of information that is going to throw cases brought by the Consumer Financial Protection Bureau (CFPB) into a mess.

On June 21, 2018, Senior United States District Judge Loretta Preska ruled the CFPB “is unconstitutionally structured and lacks authority to bring claims.”

In the case CFPB v. RD Legal Funding, the Judge said, “the Clerk of Court shall terminate Plaintiff Consumer Financial Protection Bureau as a party to this action.”

In the past, a DC court ruled the CFPB was appropriately constituted and this latest decision just throws a wrench in the works.

Judge Perska further held that the provision of the statute that she held unconstitutional cannot be severed from the rest of the section of the Dodd-Frank Act that established the CFPB, and she, therefore, held the entire section to be invalid.

The ruling by Judge Perska does not impact all courts and all judges. Jeff Sovern says, “While Judge Preska would surely dismiss any claims brought by the CFPB that land in her court, her decision does not bind any other district court judge, and so the Bureau could still bring cases before other judges, including other judges in the Southern District of New York.”

You can read the full opinion here.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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