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The CFPB is defending its single-director structure as constitutional as it appeals a New York federal judge's ruling that it is unconstitutional. NAFCU has long advocated that the bureau's structure be reformed from a single director to a five-person, bipartisan commission.

In the lawsuit brought by the CFPB and the New York Attorney General against RD Legal Funding, Senior U.S. District Judge Loretta Preska in June 2018 determined the bureau's structure was unconstitutional, citing the dissent argument by the U.S. Court of Appeals for the D.C. Circuit in the PHH Corp. lawsuit. The dissent in that case concluded that the bureau "is unconstitutionally structured because it is an independent agency that exercised substantial executive power and is headed by a single Director."

In the CFPB's brief in the U.S. Court of Appeals for the Second Circuit filed last week, the agency argued that Supreme Court precedent reinforces its constitutionality, and also that its structure "does not impede the president's ability to perform his constitutional duties."

Although PHH Corp. declined to appeal the D.C. Circuit's ruling, there continues to be other challenges: The Fifth Circuit Court of Appeals heard oral arguments this month for a challenge to the bureau's constitutionality brought by defendants accused by the bureau in 2016 of engaging in unfair payday lending conduct.

However, earlier this year, the Supreme Court declined to hear a lawsuit challenging the bureau's structure.

Also of note, the Fifth Circuit in July determined that the Federal Housing Finance Agency's (FHFA) structure, which is also single director, is unconstitutional.

NAFCU is supportive of legislation to reform the bureau's governance structure to a bipartisan commission, as well as other reforms pursued by Congress.