Federal Court Rules BCFP’s Structure Unconstitutional

A federal District Court in New York just ruled that the structure of the Bureau of Consumer Financial Protection (BCFP) is unconstitutional. The ruling is at odds with a February ruling by the federal appeals court in Washington that upheld the BCFP's structure.

The U.S. District Court for the Southern District of New York said the bureau is "unconstitutionally structured because it is an independent agency that exercises substantial executive power and is headed by a single director."

The decision was handed down in a case that was brought in 2017 by BCFP and the New York attorney general against a firm accused of bilking first responders to the September 11th attacks. The judge actually recommended eliminating the entire section of Dodd-Frank that created BCFP.

If another appeals court upholds Thursday’s ruling, it raises the likelihood that the Supreme Court will take up the issue of the BCFP’s constitutionality.

Credit unions, the Leagues and CUNA have long advocated for replacing the single director with a five-member commission to ensure better accountability.

You can read the court’s ruling here.