DC court finds CFPB structure unconstitutional

A three-judge panel on the DC Circuit Court of Appeals declared the CFPB structure unconstitutional. According to the panel, the Bureau violated the Constitution’s separation of powers doctrine because its sole director, Richard Cordray, is not sufficiently accountable to the president. In its decision, the court explained that CFPB’s single director leadership structure is unlike other independent agencies that are not accountable to the president because their leadership is checked by multiple commissioners or board members.

CFPB fines TitleMax $9 million

On September 26, the CFPB issued a press release announcing that it has entered into a consent order with TMX Finance, LLC (TMX). The consent order settles allegations that the title lender engaged in unfair collection practices and failed to provide sufficient information to consumers regarding the terms of auto title loans, pawns or pledges. TMX is required to pay a $9 million penalty to the Bureau’s Civil Penalty Fund.

CFPB sues five Arizona title lenders

On September 20, the CFPB filed individual administrative lawsuits against five auto title lenders operating in the State of Arizona. The Bureau claims that all five lenders failed to adequately disclose the annual percentage rate (APR) on their website or in online advertisements promoting title loans. For each action, the Bureau filed a Notice of Charges. A Notice of Charges is comparable to a complaint filed in federal court, but instead initiates the proceedings in an administrative forum. The cases, if they do not settle, will be tried by an Administrative Law Judge (ALJ) from the CFPB’s Office of Administrative Adjudication. The ALJ will hold hearings and offer a recommendation to CFPB Director Richard Cordray who will issue a final decision. That decision may be appealed to a federal court.