The question of what are appropriate checks on independent regulators continues to be a focus for courts around the country, but the issue has now extended way beyond the Consumer Financial Protection Bureau.
A three-judge panel for the U.S. Court of Appeals has ruled that the Fifth Circuit ruled that the Federal Housing Finance Agency's leadership structure—with a single director at the top who can be fired only for cause—is unconstitutional.
The decision—which could be appealed to the full panel of Fifth Circuit judges or the Supreme Court—echoes a similar ruling in 2016 written by Judge Brett Kavanaugh, of the D.C. Circuit, that the CFPB's single-director structure was unconstitutional.
That CFPB decision was later overturned by a full panel of the D.C. Circuit. But with Kavanaugh now nominated for a Supreme Court seat, and plaintiffs clearly still interested in using the constitutional argument to fight regulatory power, the issue could be coming to a head with big implications for both agencies.
Read more in American Banker.