A federal appeals court handed a major victory — and a significant defeat — to the CFPB by upholding its constitutional structure while also slapping down the agency's practice of making new interpretations of law through enforcement actions.
The decision by the appeals court means that a president can only fire the head of the Consumer Financial Protection Bureau for cause. But the ruling also scrapped the CFPB's massive fine against a nonbank mortgage lender.
In a blow to the Consumer Financial Protection Bureau, a federal judge rejected the agency's request for over $280 million in penalties against the California lender CashCall, ruling that the lender's violations did not justify such a large fine.
After a significant setback this week in the legal bid to unseat Mick Mulvaney as acting director of the Consumer Financial Protection Bureau, consumer groups are pinning their hopes on a second case they hope will provide a different result.