All American Check Cashing and CFPB submit letter briefs to Fifth Circuit

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All American Check Cashing and the CFPB have submitted letter briefs to the Fifth Circuit regarding what action the court should take in light of the en banc Fifth Circuit’s decision in Collins v. Mnuchin that held the FHFA’s structure is unconstitutional.

In March 2019, a Fifth Circuit panel heard oral argument in All American’s interlocutory appeal from the district court’s ruling upholding the CFPB’s constitutionality.  Last month, the panel directed the parties to file the letter briefs.  (Rather than wait for a decision from the Fifth Circuit panel, All American has also filed a Petition for a Writ of Certiorari Before Judgment with the U.S. Supreme Court.)

Having announced that it will not defend the CFPB’s constitutionality in the appellate courts or the Supreme Court, the CFPB concedes in its letter brief that its structure is unconstitutional but argues that, following the en banc Fifth Circuit’s approach in Collins, the proper remedy is to sever the CFPA for-cause removal provision but not grant All American’s motion for judgment on the pleadings.  It also argues that the panel should allow the enforcement action to proceed because it was ratified by Acting Director Mulvaney and Director Kraninger does not support dismissal of the enforcement action.

In its letter brief (as it did in its cert petition), All American argues that the en banc Fifth Circuit’s conclusion that the FHFA is unconstitutionally structured supports the same conclusion as to the Bureau’s constitutionality but that because the CFPA for-cause removal provision cannot be severed, the proper remedy is to reverse the district court’s denial of All American’s motion for judgment on the pleadings and not allow the CFPB’s enforcement action to proceed.  It also argues that any purported ratification of the enforcement action was ineffective.

The Supreme Court could issue a decision tomorrow on the petition for a writ of certiorari filed by Seila Law seeking review of the Ninth Circuit’s ruling that the CFPB’s structure is constitutional.  The briefs on Seila Law’s petition were distributed for the Supreme Court’s October 11 conference

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