Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

https://nclalegal.org/moroney-cfpb/

"While the case was pending, CFPB petitioned the court to enforce its civil investigative demand (CID) against Crystal Moroney’s law firm in Bureau of Consumer Financial Protection v. Law Offices of Crystal Moroney. CFPB sought to compel production of documents and information related to the law firm’s debt collection practices dating back to 2014. But in addition to policies, procedures, and communications with debtors, the CID also unlawfully seeks confidential and privileged attorney-client material generated in the course of Ms. Moroney’s practice of law. Moreover, CFPB pursued its enforcement action in the wake of Seila Law with an invalid attempt to ratify the prior unconstitutional issuance of the CID and related administrative proceedings.

On August 18, 2020, the District Court for the Southern District of New York ruled in CFPB’s favor, holding that its funding structure does not violate the Nondelegation Doctrine, that CFPB validly executed its post-Seila Law ratification, and that the CID is not an unlawful attempt to regulate the practice of law. NCLA is appealing that decision.

NCLA filed Appellant’s Brief on March 5, 2021, asking the Court of Appeals to resolve three questions: 1) Title X of the Dodd-Frank Act violates Article I’s Appropriations and Vesting Clauses; 2) the Director’s attempt to blindly ratify the second CID was ineffectual because she intentionally caused the constitutional harm of which Ms. Moroney complains, along with several other defects in her attempted ratification; and 3) the second CID is unreasonable because it seeks information prohibited by Title X. NCLA is asking the court to reverse the district court’s erroneous judgment and dismiss the second unlawful CID."

https://consumerfsblog.com/2023/03/the-cfpb-funding-structure-is-constitutionally-sound-says-2nd-circuit/

“We cannot find any support for the Fifth Circuit’s conclusion in Supreme Court precedent . . . [or] in the Constitution’s text,” the Second Circuit panel wrote. Citing a 1990 Supreme Court decision, the Second Circuit concluded that a funding scheme that is “authorized by a statute” is all that is required under the Appropriations Clause. There is no question that Congress did just that in 2010 when it crafted the CFPB’s funding scheme in section 1017 of the Dodd-Frank Act.

The Fifth Circuit’s reasoning that annual or “time limited appropriations” are a necessary element missing from the Bureau’s funding scheme fared no better. The text of the Constitution, the Second Circuit noted, only places time limitations on funds to “raise and support an army.” Since no other funding has such a limitation, by negative implication the Fifth Circuit could not impose one.

A BATTLE OVER THE BREADTH OF AGENCY POWER

As much as this appears to be an argument over the CFPB, it is likely bigger than that. A few weeks ago I wrote that when the Supreme Court decided to take up the Fifth Circuit’s decision, it looked like the stage was set for a battle between two philosophies.

One is concerned that administrative agencies wield excessive power and are not constitutionally sound because elected officials do not have sufficient control over them. The other believes agencies should not be easily swayed by politics, and so, need to be insulated from political winds. Because they are composed of professional civil servants, they carry out their functions within the bounds of formal and technical restraints.