Ninth Circuit puts hold on CashCall appeal pending SCOTUS decision in Seila Law; CFPB asks Second Circuit to adjourn oral argument in RD Legal pending decision

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As expected, the U.S. Supreme Court’s grant of Seila Law’s cert petition is impacting other cases in which the CFPB’s constitutionality has also been challenged.

In CFPB v. CashCall, CashCall appealed to the Ninth Circuit from the district court’s decision ordering CashCall to pay a $10 million statutory fine based on its finding that it was the “true lender” of loans issued to borrowers in 16 states. CashCall’s grounds for appeal include the district court’s rejection of its constitutional challenge to the CFPB. The Ninth Circuit heard oral argument last month. Last week, the Ninth Circuit issued an order withdrawing submission of the appeal and staying all further proceedings until the Supreme Court’s decision in Seila Law.

In CFPB and People of the State of New York v. RD Legal, the CFPB and NYAG appealed to the Second Circuit from the district court’s decision holding the CFPB’s structure is unconstitutional and striking all of Title 10 of Dodd-Frank. (The CFPB has since announced that it will no longer defend its constitutionality in the appellate courts or the Supreme Court.) Oral argument is currently scheduled in the Second Circuit for November 21, 2019.

The CFPB has filed a motion with Second Circuit to adjourn oral argument until after Supreme Court issues a decision in Seila Law. The CFPB advised the court that the NYAG does not take a position on the motion but does not intend to file a response.

RD Legal filed a response opposing the CFPB’s motion in which it argues that unless the Supreme Court finds that the Dodd-Frank for-cause removal provision is unconstitutional and cannot be severed, the Supreme Court’s decision will not resolve the issues in RD Legal, specifically whether RD Legal is a “covered person” under the Consumer Financial Protection Act.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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