The Consumer Financial Protection Bureau (CFPB) is predicted to experience unprecedented levels of public and private enforcement activity following its recent success at the US Supreme Court. The Bureau’s director, Rohit Chopra, declared that their enforcement is now “firing on all cylinders.”
The Court’s decision carries immediate and considerable implications for the consumer finance industry. Especially noteworthy is the CFPB’s recent announcement of plans to expand its enforcement team by 200 staff members. However, the long-reaching effects of the Supreme Court’s ruling remain uncertain.
In the case of the Consumer Financial Protection Bureau v. Community Financial Services Association of America, the Supreme Court ruled 7-2 that the CFPB’s funding structure complies with the Appropriations Clause of the US Constitution. This reversed the US Court of Appeals for the Fifth Circuit’s prior decision, which had invalidated the CFPB’s funding structure.
With the Supreme Court decision in its favor, the Bureau is showing signs that it intends to resume all its activities—rulemaking, investigation, and enforcement—at full speed. The CFPB has unfrozen a rule on small business lending data collection, that had been previously blocked on account of the perceived constitutional violation, and another on credit-card late fees.
Simultaneously, CFPB is also likely to face new challenges relating to how it operates as an agency and the scope of its powers. These challenges could pertain to its use of administrative law judges or could be about the limits of the CFPB’s power and ambit of regulation. However, as these hurdles are overcome, businesses and legal professionals should brace themselves for a renewed flurry of enforcement activity from the Consumer Financial Protection Bureau.