CFPB files ratification with Ninth Circuit in Seila Law; Ninth Circuit orders supplemental briefing on ratification

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The CFPB has filed a declaration with the Ninth Circuit in which Director Kraninger stated that she has ratified the Bureau’s decisions to issue a civil investigative demand to Seila Law, deny Seila Law’s request to modify or set aside the CID, and file a petition in federal district court to enforce the CID.

The CFPB had previously argued in the Ninth Circuit that former Acting Director Mulvaney’s ratification of the CID had cured any constitutional deficiency.  Having ruled that the CFPB’s structure is unconstitutional, the U.S. Supreme Court remanded the case to the Ninth Circuit to consider the CFPB’s ratification argument.  In its letter to the Ninth Circuit transmitting Director Kraninger’s declaration, the CFPB asserted that either former Acting Director Mulvaney’s ratification alone or Director Kraninger’s ratification alone would be sufficient to cure the constitutional deficiency and “[t]he fact that the CID has now been approved by not one but two officials fully accountable to the President only confirms that it should be enforced.”

In a letter to the Ninth Circuit responding to the CFPB’s letter, Seila Law asserted that it “believes that the CFPB’s purported ratifications—by former Acting Director Mulvaney and current Director Kraninger—are inadequate to cure the CID’s deficiencies. Seila Law seeks the opportunity to fully brief these legal issues so that they can be resolved by this Court consistent with the directive from the Supreme Court on remand.”

On July 31, the Ninth Circuit entered an order directing the parties “to file supplemental briefs addressing whether the civil investigative demand was validly ratified.”  The CFPB’s brief must be filed by August 30, and Seila Law’s brief must be filed no later than 30 days after the CFPB’s supplemental brief is filed.  The Ninth Circuit indicated in its order that it will notify the parties if it wishes to schedule oral argument.

The CFPB has also filed ratification declarations in RD Legal Funding and All American Check Cashing, two other circuit court cases involving a challenge to the Bureau’s constitutionality that were put “on hold” pending the Supreme Court’s decision in Seila Law.  On July 10, the CFPB filed a declaration with the Second Circuit in RD Legal Funding in which Director Kraninger stated that she has ratified the Bureau’s decisions to file the enforcement action against RD Legal and to appeal from the district court’s dismissal of the action.  On July 17, the CFPB filed a declaration with the Fifth Circuit in which Director Kraninger stated that she has ratified the Bureau’s enforcement action against All American Check Cashing.

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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