Last Friday, July 21, 2023, marked the CFPB’s twelfth anniversary.  To publicize the occasion, the CFPB published a blog post on July 20 in which it touted its achievements and ongoing initiatives.

As the CFPB begins its thirteenth year, it does so under another constitutional cloud.  Indeed, this cloud potentially presents a greater threat to its future than the challenge to the “for cause” restriction on the President’s authority to remove the CFPB Director that the Supreme Court resolved in its 2020 Seila Law decision.  The current threat faced by the CFPB is the challenge to the constitutionality of its funding mechanism in Community Financial Services Association of America Ltd. v. CFPB.  In the case, CFSA has asked the Supreme Court to affirm the Fifth Circuit panel decision which held that the CFPB’s funding mechanism violates the Appropriations Clause of the U.S. Constitution.  Oral argument is scheduled for October 3, 2023.  The early oral argument date creates the potential for a decision from the Court by early 2024.  Should the Supreme Court rule that the CFPB’s funding is unconstitutional, the CFPB’s next anniversary could occur in the midst of a contentious Congressional battle about its future.

Perhaps intended to coincide with the CFPB’s anniversary, Director Chopra gave several recent interviews to news organizations, including one with Law360.  While much of Director Chopra’s comments echoed previous comments, he did make the following noteworthy comments:

• Despite acknowledging that “the shift in industry when it comes to cutting down on junk fees has been very promising,” Director Chopra indicated that the CFPB continues to consider possible overdraft and NSF fee rulemaking to prevent the banking industry from backtracking. 
• Director Chopra defended the data and analysis used by the CFPB for its proposed rule that would reduce the credit card late fee safe harbors to $8, asserting that it was “far more rigorous” than the analysis used by the Federal Reserve in establishing the current credit card late fee safe harbors.  We would take issue with Director Chopra’s assertion.  TILA requires the CFPB to consider “the cost” incurred by the creditor from a violation in determining the amount of the late fee.  As indicated in the comment letter on the CFPB’s proposal submitted by Auriemma Roundtables together with First National Bank of Omaha and a group of several other premier consumer financial services firms, the CFPB failed to consider data that was considered by the Board and was conclusory and superficial in its consideration of cost.  (Ballard Spahr served as counsel to Auriemma Roundtables in preparing the comment letter.)
• Director Chopra indicated that the CFPB has been hiring technologists, data scientists, and other technical experts to assist in fair lending examinations that will look at potential discrimination in new technologies and digital design issues related to how companies are offering services online.