Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca5-18-60302/USCOURTS-ca5-18-60302-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 18-60302

CONSUMER FINANCIAL PROTECTION BUREAU, 

 Plaintiff - Appellee

v.

ALL AMERICAN CHECK CASHING, INCORPORATED; MID-STATE 

FINANCE, INCORPORATED; MICHAEL E. GRAY, Individually, 

 Defendants - Appellants

Appeal from the United States District Court

for the Southern District of Mississippi

Before HIGGINBOTHAM, SMITH, and HIGGINSON, Circuit Judges.

STEPHEN A. HIGGINSON, Circuit Judge:

In Collins v. Mnuchin, our court was explicit that its holding on the 

constitutionality of the FHFA’s structure was not inconsistent with the D.C. 

Circuit’s holding in PHH Corp. v. CFPB, 881 F.3d 75 (D.C. Cir. 2018). See 

Collins, 896 F.3d 640, 672–74 (5th Cir. 2018); Collins, 938 F.3d 553, 588 (5th 

Cir. 2019) (en banc) (reinstating the relevant portion of the Collins panel 

majority decision). Persuaded by the thoughtful and reasoned analysis of that 

circuit and the Ninth Circuit, which addressed the same question in CFPB v. 

Seila Law LLC, 923 F.3d 680 (9th Cir. 2019), cert. granted, 140 S. Ct. 427 

United States Court of Appeals

Fifth Circuit

FILED

March 3, 2020

Lyle W. Cayce

Clerk

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(2019), I conclude that the restrictions on the President’s removal authority 

under the Consumer Financial Protection Act are valid and constitutional.

The issue is both fundamental and contestable, and it is not an issue that 

has been clearly answered by existing Fifth Circuit precedent, though I am 

persuaded that our existing precedent does not compel a contrary conclusion. 

See Collins, 896 F.3d at 673 (highlighting the “salient distinctions” between 

the CFPB and the FHFA that make the court’s reasoning in Collins consistent 

with the reasoning in PHH). Therefore, I look forward to its likely resolution 

by the Supreme Court. As my colleagues are aware, my own preference in this 

specific, post-Collins case would have been to hold our matter several months 

in abeyance.1 That preference was unpersuasive for reasons I respect and, 

indeed, I now am confident that views they may choose to elaborate will offer 

new insights to the Supreme Court. 

Three circuits have now weighed in on this important question, and the 

Supreme Court will benefit from those perspectives, as well as the

comprehensive and well-reasoned brief of court-appointed amicus curiae. 

Given the many eloquent voices that have spoken on this question—in 

majority, concurring, and dissenting opinions—I see little reason to “re-plow 

the same ground here,” Seila Law, 923 F.3d at 682.

Thus, finding that neither the text of the Constitution nor the Supreme 

Court’s previous decisions support the Appellants’ arguments that the CFPB 

is unconstitutionally structured, the district court is AFFIRMED.

1 As I emphasize in my opening sentence, the constitutionality of the CFPB’s removal 

provision was left open by the Collins majority, notwithstanding the contrary viewpoint 

expressed by my dissenting colleague. I would also add that there would have been no need 

for this panel’s intercession had the court chosen to place this case in abeyance until the 

Supreme Court decides the identical issue that it heard today.

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PATRICK E. HIGGINBOTHAM, Circuit Judge, joined by STEPHEN A.

HIGGINSON, Circuit Judge, concurring:

In the wake of the 2008 financial crisis, a special commission formed by 

Congress found that “failures in financial regulation and supervision” had 

“proved devastating to the stability of the nation’s financial markets.”1 The 

consumer-protection system, with its “seven different federal regulators,” was 

“too fragmented to be effective.”2 Congress concluded that in the run-up to the 

recession these regulators “had failed to prevent mounting risks to the 

economy, in part because [they] were overly responsive to the industry they 

purported to police.”3

Congress responded. It created the Consumer Financial Protection 

Bureau (“CFPB” or the “Bureau”), “a new, streamlined independent consumer 

entity housed within the Federal Reserve System.”4 In placing the federal 

consumer-financial protection apparatus under the roof of a single agency with 

civil enforcement power, Congress sought increased accountability, 

consistency, and escape from regulatory capture, ultimately ensuring “that 

markets for consumer financial products and services are fair, transparent, 

and competitive.”5

To that end, the Consumer Financial Protection Act (“CFPA”) created 

the Bureau and tasked the new entity with “implement[ing] and, where 

applicable, enforc[ing]” eighteen preexisting consumer-protection statutes.6 It 

also charged the Bureau with taking enforcement actions against “unfair, 

1 NAT’L COMM’N ON THE CAUSES OF THE FIN. & ECON. CRISIS IN THE U.S., FINANCIAL 

CRISIS INQUIRY REPORT, at xviii (2011). 

2 S. REP. NO. 111-176, at 10 (2010). 

3 PHH Corp. v. CFPB, 881 F.3d 75, 77 (D.C. Cir. 2018) (en banc).

4 S. REP. NO. 111-176, at 11. 

5 12 U.S.C. § 5511(a).

6 Id; see also id. § 5481(12). The CFPA is Title X of the Dodd-Frank Wall Street Reform 

and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010).

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deceptive, or abusive” practices related to consumer financial products and 

services, such as retail banking, payday lending, and financial data processing, 

to name a few.7 As needed, the Bureau may promulgate rules, issue orders and 

guidance, and supervise banks, payday lenders, and other covered entities.8

The Bureau also has tools for conducting investigations and administrative 

discovery, including the power to issue subpoenas and civil investigative 

demands.9 And it may hold hearings and conduct adjudications, as well as 

bring civil enforcement actions in court through its own attorneys and in its 

own name.10

Drawing on familiar features of agency design, Congress centralized 

control of the new agency by handing the reins to a single CFPB director 

appointed for a five-year term by the President with the advice and consent of 

the Senate and removable by the President for “inefficiency, neglect of duty, or 

malfeasance in office.”11 Like other financial regulators, the CFPB’s funding 

does not flow from annual congressional appropriations.12 Instead, the director 

requests from the Federal Reserve Board of Governors “the amount 

determined . . . to be reasonably necessary to carry out the authorities of the 

Bureau” each year,13 capped by statute at twelve percent of the Federal 

Reserve System’s budget.14

While consolidating the dispersed enforcement regime with its 

vulnerability to agency capture, Congress remained attentive to the nigh 

7 12 U.S.C. § 5531. 8 See id. §§ 5512(b), 5514–16.

9 See id. § 5562 (a)–(c). 

10 See id. §§ 5563, 5564(a)–(b).

11 Id. § 5491(b), (c)(3).

12 See, e.g., id. § 16 (Comptroller of the Currency); id. § 243 (Federal Reserve Board); 

id. §§ 1815(d), 1820(e) (Federal Deposit Insurance Corporation). 

13 Id. § 5497(a)(1).

14 Id. § 5497(a)(2)(A)(iii).

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axiom that financial regulators work most effectively with a measure of 

independence attending the accountability of executive oversight.15 The result 

was a CFPB overseen by the Financial Stability Oversight Council (“FSOC”), 

which has veto power over any rule it concludes will “put the safety and 

soundness of the United States banking system or the stability of the financial 

system of the United States at risk.”16 The President appoints a majority of the 

FSOC’s members, all experts in banking, finance, or insurance.17 “Thus, if the 

Director’s decisionmaking goes awry on a critical rulemaking, a multi-member 

body of experts can step in” to correct it.18 In sum, the line of authority runs 

directly to the President. 

I.

In 2016, the CFPB filed this civil enforcement action against two 

Mississippi-based check-cashing and payday-lending entities and their owner, 

Michael Gray (collectively, the “Payday Lenders”) in the Southern District of 

Mississippi.

The complaint alleged that the Payday Lenders had engaged in “unfair, 

deceptive, or abusive act[s] or practice[s]”19 by, among other things, “refusing 

to disclose [their] check cashing fee,” unlawfully “retain[ing] overpayments

made by consumers,” and “misrepresent[ing] the amount and number of fees 

associated” with their lending services. From 2011 to 2017, the Payday 

15 See generally HENRY B. HOGUE ET AL., CONG. RESEARCH SERV., R43391,

INDEPENDENCE OF FEDERAL FINANCIAL REGULATORS: STRUCTURE, FUNDING, AND OTHER 

ISSUES (2017).

16 12 U.S.C. § 5513(a).

17 Id. § 5321(b). Of the FSOC’s ten members, the President “has the opportunity to 

appoint either at the outset or near the beginning of the administration” six of them: the 

Secretary of the Treasury and the chairpersons of five independent agencies. PHH, 881 F.3d 

at 120 n.3 (Wilkins, J., concurring). The remaining four members of the Council serve terms 

longer than four years and so will not necessarily be appointed by a one-term president. Id.

18 PHH, 881 F.3d at 120 (Wilkins, J., concurring). 

19 12 U.S.C. § 5531(a); see id. § 5536(a)(1)(B). 

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Lenders “charged more than 46,000 consumers more than $5.4 million in 

[unauthorized] check-cashing fees”—just one of the ways they allegedly fleeced 

consumers. Over this period, Gray, their owner, assertedly paid himself “more 

than $13.5 million in compensation,” plus salaries to his wife, seven-year-old

son, and six-month-old daughter. 

The Payday Lenders responded that the CFPB is unconstitutionally 

structured and that any enforcement action it initiates is void from its 

inception.20 Looking to the D.C. Circuit’s then-recent en banc opinion in PHH 

Corporation v. CFPB,21 the district court denied the Payday Lenders’ motion 

to dismiss, holding that “the Bureau is not unconstitutional based on its singledirector structure.” The district court then certified its order for interlocutory 

appeal, observing that this case presents “substantial ground for difference of 

opinion.”22

Meanwhile, a petition for en banc review was granted in Collins v. 

Mnuchin, which presented a constitutional challenge to the Federal Housing 

Finance Agency (“FHFA”), the federal regulator of two government-sponsored 

entities (“GSEs”).23 The en banc Court declined to consolidate the two cases. 

This panel then heard oral argument but withheld decision pending the en 

banc Court’s resolution of Collins. Collins ultimately held that the FHFA’s 

“unique constellation of insulating features offends the Constitution’s 

separation of powers.”24 In essence, the en banc Court determined that the 

FHFA is too insulated from executive control because it is funded through 

20 The Payday Lenders raised other defenses, but only its claim of unconstitutional 

structure is before the Court on appeal. 

21 See 881 F.3d 75, 78 (D.C. Cir. 2018).

22 See 28 U.S.C. § 1292(b).

23 Collins v. Mnuchin, 896 F.3d 640 (5th Cir. 2018).

24 Id. at 670; see Collins v. Mnuchin, 938 F.3d 553 (5th Cir. 2019) (en banc).

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annual assessments on the GSEs, is free of any formal executive control, and 

is led by a single director removable only for cause.25

The Collins Court distinguished PHH, where the D.C. Circuit rejected 

similar attacks on the CFPB’s constitutionality.26 Collins emphasized the 

differing structures of the FHFA and CFPB, noting that while the Executive 

Branch has no authority over the FHFA, it “can directly control the CFPB’s 

actions through the FSOC.”27 In its words, this distinction between the two 

agencies “compel[led] a contrary conclusion.”28 It follows that Collins’s analysis 

of the FHFA is not offended by the panel’s analysis of the defenses to the 

Bureau’s suit proffered here. 

On the filing of Collins, we directed the parties to respond to its effect 

and held a second round of oral argument. The CFPB then notified the Court 

of an about-face in its litigation position. The CFPB Director had defended the 

constitutionality of the agency’s structure, but advised that she now “agrees 

with the Department of Justice that the CFPA’s for-cause removal provision 

impermissibly infringes on the President’s constitutional obligation to take 

care that the laws be faithfully executed.”29

II.

The Payday Lenders argue that the structure of the CFPB denies the 

Executive Branch its due because the Bureau is led by a single director 

removable by the President only for cause. We find no support for this 

25 Collins, 896 F.3d at 674 (panel); Collins, 938 F.3d at 588 (en banc) (reinstating the 

opinion of the Collins panel with respect to the constitutionality of FHFA’s structure).

26 Collins, 896 F.3d at 670–74 (panel); see Collins, 938 F.3d at 588 (en banc) 

(distinguishing PHH).

27 Collins, 896 F.3d at 673 (panel).

28 Id.

29 On October 18, 2019, the Supreme Court granted certiorari to hear an appeal of the 

Ninth Circuit’s decision in CFPB v. Seila Law LLC, which upheld the CFPB’s 

constitutionality on grounds similar to the D.C. Circuit’s in PHH. Seila Law, 923 F.3d 680 

(9th Cir.), cert. granted, 140 S. Ct. 427 (2019).

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argument in constitutional text or in Supreme Court decisions and uphold the 

constitutionality of the CFPB’s structure, as did the D.C. and Ninth circuits. 

The Constitution grants Congress the authority to establish and 

structure executive-branch offices, agencies, and departments. The 

Appointments Clause, with its complementing Necessary and Proper Clause, 

establishes Congress’s role as chief architect of the Executive Branch: 

[The President] shall nominate, and by and with the Advice 

and Consent of the Senate, shall appoint . . . all other Officers of 

the United States, whose Appointments are not herein otherwise 

provided for, and which shall be established by Law: but the 

Congress may by Law vest the Appointment of such inferior

Officers, as they think proper, in the President alone, in the Courts 

of Law, or in the Heads of Departments.30

All officers, whether principal or inferior, are established “by Law”—an Act of 

Congress, not presidential order.31 The President may appoint officers, but 

beyond his veto power he has no special role in the creation of their offices. 

This is because the Necessary and Proper Clause sweeps the authority to 

establish offices into Article I, providing Congress not only the power to make 

all laws “necessary and proper for carrying into Execution” its enumerated 

powers but also “all other Powers vested by this Constitution in the 

Government of the United States, or in any Department or Officer thereof.”32

These clauses allocate the power to assemble the structures of our 

government—Congress may both create an agency and define its authorities, 

responsibilities, leadership structure, and chain of command. As James 

Madison explained it to the First Congress in New York: “The Legislature 

creates the office, defines the powers, limits its duration, and annexes a 

30 U.S. CONST. Art. 2, § 2, cl. 2 (emphases added).

31 This excludes those offices specifically provided for in the Constitution. 

32 U.S. CONST. Art. 1, § 8, cl. 18 (emphasis added). 

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compensation.”33 That is, the Constitution gave Congress the task of building 

the Executive Branch, explaining the want of attention by the First Congress 

to the President’s role in establishing offices before creating the first executive 

departments and their corresponding principal and inferior offices.34

And so it is unsurprising that Congress’s authority to organize the 

Executive Branch presents as well established in contrast to the less certain 

foundations of a President’s authority to remove officers. Impeachment aside, 

the President’s power of removal was little discussed at the Constitutional 

Convention and is not addressed in the Constitution.35 And the Framers held 

disparate views on where the power of removal ought reside. Alexander 

Hamilton argued that the “consent of [the Senate] would be necessary to 

displace as well as to appoint” officers.36 But Madison then argued in the First 

Congress that there was no limit on the President’s constitutional authority to 

remove the Secretary of Foreign Affairs, while intimating that Congress may 

limit the scope of the President’s removal power over certain officers.37 The 

Supreme Court has since found the President’s removal power to be implicit in 

the Executive Vesting Clause and the Take Care Clause: “Article II vests ‘[t]he 

executive Power . . . in a President of the United States of America,’ who must 

‘take Care that the Laws be faithfully executed.’”38 Thus, Congress cannot so 

33 See 1 ANNALS OF CONG. 581 (1789). 34 DAVID P. CURRIE, THE CONSTITUTION IN CONGRESS: THE FEDERALIST PERIOD 1789-

1801, at 36 n.205 (1997).

35 Myers v. United States, 272 U.S. 52, 109–10 (1926).

36 THE FEDERALIST NO. 77. 37 1 ANNALS OF CONG. 611–12 (1789) (stating that an official who “partakes strongly 

of the judicial character . . . should not hold . . . office at the pleasure of the Executive branch 

of the Government”).

38 Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 483 (2010) 

(quoting U.S. CONST. Art. II, § 1, cl. 1; and id. § 3). 

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constrain the President’s removal authority as to deprive him of the ability to 

perform his “constitutionally assigned duties.”39

Against Congress’s sweeping textually footed power to organize agencies 

and the President’s judicially implied, necessary authority to remove officers, 

the Supreme Court has, without exception, upheld for-cause protection for 

officers so long as removal authority remains in the hands of the President or 

his at-will agents.40 In Humphrey’s Executor v. United States, the Court upheld 

for-cause protection for Federal Trade Commissioners.41 In Wiener v. United 

States, it upheld for-cause protection for the War Claims Commissioners, who 

were responsible for adjudicating claims arising out of World War II.42

Significantly, the Wiener Court recognized removal protection for the 

Commissioners though the statute was silent on such limits. Similarly, in Free 

Enterprise Fund v. PCAOB, the Court inferred for-cause protection for SEC 

commissioners.43 The Court also upheld for-cause removal protection for the 

independent counsel in Morrison v. Olson, even though Congress had given the 

removal authority to the President’s at-will agent, the Attorney General.44

Although the Supreme Court has never invalidated a for-cause stricture 

on the President’s removal power, it has struck down officer removal 

restrictions three times—each where the removal power has been held by 

Congress or given to someone other than the President. In Myers v. United 

States, the Court held Congress could not condition the President’s decision to 

39 Morrison v. Olson, 487 U.S. 654, 696 (1988). 40 These cases were described at greater length in PHH, 881 F.3d at 96. Like the Ninth 

Circuit, “[w]e see no need to re-plow the same ground here.” Seila Law, 923 F.3d at 682. 41 295 U.S. 602 (1935).

42 357 U.S. 349 (1958). 

43 561 U.S. at 487 (internal citations omitted) (quoting Humphrey’s Ex’r, 295 U.S. at 

620) (“The parties agree that the Commissioners cannot themselves be removed by the 

President except under the Humphrey’s Executor standard of ‘inefficiency, neglect of duty, or 

malfeasance in office,’ and we decide the case with that understanding.”).

44 487 U.S. 654 (1988). 

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remove an officer on the advice and consent of the Senate.45 Likewise, in 

Bowsher v. Synar, the Court concluded that Congress could not retain the 

authority to remove an executive officer.46 Most recently, in Free Enterprise 

Fund v. PCAOB, the Court returned to the issue of removal power where 

members of the Public Company Accounting Oversight Board (“PCAOB”) could 

be removed only for cause and only by SEC Commissioners, not the 

President.47 The Court held that Congress withdrew “from the President any 

decision on whether that good cause exists. That decision [was] vested instead 

in other tenured officers—the Commissioners—none of whom [was] subject to 

the President’s direct control.”48 The Court invalidated the PCAOB’s for-cause 

protection but left intact the SEC’s for-cause protection. In so doing, the Court 

effectively returned the power of removal to the President’s hand.49

The structure of the CFPB is well within the constitutional lines drawn 

by the Supreme Court. In the CFPA, Congress gave itself no removal authority. 

It only imposed a constraint on removal that the Supreme Court has twice read 

into otherwise silent statutes.50 And Congress left the decision to remove the 

CFPB Director to the President alone: Neither Congress nor any subordinate 

officer plays a role in the President’s exercise of his removal authority. This 

forecloses the challenge to the constitutionality of the CFPB.

45 272 U.S. 52 (1926). 

46 478 U.S. 714 (1986). 47 561 U.S. 477 (2010).

48 Id. at 495.

49 Id. at 509 (“The Commission is then fully responsible for the Board’s actions, which 

are no less subject than the Commission’s own functions to Presidential oversight.”).

50 Id. at 487; Wiener, 357 U.S. at 349–50; see also Collins, 896 F.3d at 667 (“[L]imiting 

the President to ‘for cause’ removal is not sufficient to trigger a separation-of-powers 

violation.”). 

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Our conclusion is nigh controlled by Humphrey’s Executor.51 There, the 

Court upheld for-cause protection for FTC Commissioners, who were 

empowered to prohibit the use of “unfair methods of competition in 

commerce.”52 This protection afforded them a measure of independence vital to 

their “predominantly quasi judicial and quasi legislative” roles.53 Thus, the 

FTC and CFPB are constitutional siblings in all constitutionally relevant 

respects: They are both consumer-protection financial regulators with quasilegislative, quasi-judicial, and some executive powers, whose leaders enjoy 

identical and limited for-cause protection. 

Our issue is not the “power” of the agency in the abstract but the 

allocation of its superintendence. Still, the Payday Lenders argue that 

Humphrey’s Executor is inapposite because the CFPB is uniquely powerful. To 

be sure, the CFPB has significant civil enforcement authority that the FTC 

lacked when Humphrey’s Executor was decided in 1935.54 But as Morrison

recognized, the FTC’s restriction on for-cause removal remains constitutional 

even though the FTC, like the CFPB, can now bring civil actions.55 More 

importantly, Morrison upheld the for-cause removal restriction for the 

independent counsel even though she was authorized to investigate and 

prosecute crimes, a quintessential executive power.56 And in Free Enterprise 

Fund, the Supreme Court left in place the SEC’s for-cause removal restriction 

51 See Seila Law, 923 F.3d at 684 (“In short, we view Humphrey’s Executor and 

Morrison as controlling here.”). 52 Humphrey’s Ex’r, 295 U.S. at 620 (quoting 15 U.S.C. § 45(a)(2)).

53 Id. at 629. As the Supreme Court recognized in Morrison, “it is hard to dispute that 

the powers of the FTC at the time of Humphrey’s Executor would at the present time be 

considered ‘executive,’ at least to some degree.” 487 U.S. at 690 n. 28.

54 See Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, Pub. 

L. No. 93-637, § 205(a), 88 Stat. 2183, 2200–01 (1975) (codified as amended at 15 U.S.C. 

§ 45(m)(1)(A)) (authorizing the FTC to “commence a civil action to recover a civil penalty in 

a district court of the United States”).

55 Morrison, 487 U.S. at 692 n.31.

56 Id. at 691.

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even though the SEC, a financial regulator like the CFPB, wields broad 

enforcement, rulemaking, and adjudicatory powers.57

The Payday Lenders point out that the CFPB, unlike the FTC, is led by 

a single director, not multiple commissioners, but this offered distinction is 

without support in Supreme Court precedent. As both PHH and Seila Law

recognized, Humphrey’s Executor and Wiener attached no significance to the 

fact that the agencies were led by multiple members.58 Further, “[t]he fact that 

the independent counsel [in Morrison] was a solo actor played no role in either 

the Court’s decision for an eight-member majority or Justice Scalia’s 

dissent[.]”59 Nor in Bowsher was it of any consequence that the General 

Accounting Office was led by the Comptroller General alone and not a board of 

commissioners.60 What mattered was that Congress had appropriated to itself 

the President’s authority to remove an executive officer.

III.

Our decision in Collins provides no assistance to the Payday Lenders.61

There, we found that the FHFA’s single-member leadership, in conjunction 

with for-cause removal protection and other features, unconstitutionally 

insulated the FHFA.62 We reached this conclusion only after conducting a “factspecific inquiry,” one that made plain the reality that the FHFA is “sui 

57 Free Enter. Fund, 561 U.S. at 514.

58 Seila Law, 923 F.3d at 684; PHH, 881 F.3d at 98–99.

59 PHH, 881 F.3d at 96; see also id. at 96 n.2 (concluding that the distinction between 

inferior and principal officers is irrelevant in removal cases because they are concerned not 

with whether the officer exercises governmental authority, but with whether the officer’s 

independence interferes with the President’s constitutional obligation to ensure the faithful 

execution of the laws). 

60 478 U.S. at 731–32.

61 See Collins, 896 F.3d at 675 n. 274 (“We leave for another day the question of 

whether other agencies suffer from similar constitutional infirmities. And, of course, our 

opinion does not abrogate the Morrison Court’s holding regarding the constitutionality of an 

independent agency tasked with investigating high-ranking Executive Branch officials.”).

62 Id. at 659–75. 

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generis.”63 It is not “similarly situated” to the FTC in Humphrey’s Executor, 

the independent counsel in Morrison, or the CFPB in PHH.64 Then—and here 

it distinguishes the CFPB as well—we reasoned that whereas the FSOC’s veto 

provides the Executive Branch with “an emergency brake to hold the CFPB 

accountable,” the Executive Branch holds no formal control over the FHFA.65

Here, the single-leader structure mitigates the constitutional concerns 

underlying for-cause removal protection.66 Before the 2008 financial crisis, 

seven different agencies—“virtually all of which were also independent”67—

shared responsibility for consumer financial protection.68 The diffusion of 

responsibility looked past regulatory arbitrage and undercut accountability.69

A President determined to change the administration of consumer financial 

protection would have faced a bureaucratic maze—multiple multi-member 

agencies with disparate authorities spread across eighteen statutes.70 As the 

Supreme Court recognized in Free Enterprise Fund, “[t]he diffusion of power 

carries with it a diffusion of accountability. . . . Without a clear and effective 

chain of command, the public cannot ‘determine on whom the blame or the 

punishment of a pernicious measure, or series of pernicious measures ought 

63 Id. at 666 n. 196, 670.

64 Id. (formatting modified).

65 Id. at 670, 673–74.

66 Cf. Brief of Rachel E. Barkow, Kirti Datla, Richard L. Revesz, and Robert B. 

Thompson as Amici Curiae, p.3, CFPB v. Seila Law, No. 19-7, (petition for cert. granted, Oct. 

18, 2019) (“[T]he neat distinction between single-member agencies and multi-member 

agencies . . . rests on inaccurate descriptions of how multi-member agencies are structured, 

and how they function.”). 

67 PHH, 881 F.3d at 81. 

68 S. REP. NO. 111-176, at 11 (2010) (“The legislation ends the fragmentation of the 

current system by combining the authority of the seven federal agencies involved in consumer 

financial protection in the CFPB, thereby ensuring accountability.”). 69 Id. (“The CFPB will stop regulatory arbitrage.”); id. at 229 (“The CFPB would stop 

regulatory arbitrage—it will write rules and enforce those rules consistently[.]”). 70 12 U.S.C. §§ 5481(12), 5581(a)(2), (b) (transferring these statutory authorities to the 

CFPB). 

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really to fall.’”71

Congress replaced this unmanageable bureaucracy with the CFPB, a 

single agency led by a single director. The CFPB’s single-leader structure 

places responsibility, public scrutiny, and political pressure on the shoulders 

of one individual, preventing the risk of buck-passing that may undermine the 

accountability of some multi-member commissions.72 And it allows the 

President to exercise tighter control over the CFPB, as the President need only 

remove the Director, not several commissioners, to change its direction. His 

appointees are positioned with firm control. 

Free Enterprise Fund also eschewed the focus on miscellaneous elements 

of agency design that the Payday Lenders urge here. The Court rejected the 

dissent’s argument that agency independence often turns less on for-cause 

removal than on a host of legislative decisions about the agency structure.73 It 

dismissed these considerations as “bureaucratic minutiae” that downplay the 

“importance of the removal as a tool of supervision.”74 Indeed, the Payday 

Lenders identify no case in which a Supreme Court decision turned on such 

factors. While they cling to Free Enterprise Fund, it offers no receiving hand. 

The constitutional problem was not bureaucratic minutiae but the presence of 

layered removal clauses, which gave the power of removal to another, together

71 561 U.S. at 497–98 (quoting THE FEDERALIST NO. 72 (Alexander Hamilton)).

72 See Ganesh Sitaraman & Ariel Dobkin, The Choice Between Single Director Agencies 

and Multimember Commissions, 71 ADMIN. L. REV. 719 (2019). Ultimately, it is for Congress 

to resolve the quasi-empirical claims about the effects of different agency designs. Judges are 

not natural architects of bureaucracies, as we cannot make the fine-grained trade-offs 

inherent in the design of agencies. 

73 See Free Enter. Fund, 561 U.S. at 524 (Breyer, J., dissenting) (“[A] legislative 

decision to place ultimate administrative authority in, say, the Secretary of Agriculture 

rather than the President, the way in which the statute defines the scope of the power the 

relevant administrator can exercise, the decision as to who controls the agency’s budget 

requests and funding, the relationships between one agency or department and another, as 

well as more purely political factors (including Congress’ ability to assert influence) are more 

likely to affect the President’s power to get something done.”).

74 Id. at 500; see also PHH, 881 F.3d at 126–27 (Griffith, J., concurring in judgment).

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effectively cutting the President’s line of authority to remove the members of 

the PCAOB.

IV.

Even if the CFPB’s constitutionality be doubted, constitutional 

avoidance would counsel footing our decision on statutory grounds: “It is the 

duty of federal courts to construe a statute in order to save it from 

constitutional infirmities[.]”75 We may read the standard to impose only a 

lesser limit on the President’s power to remove. One such reading appears in 

PHH, which concluded that “inefficiency” should be read to permit removal on 

the basis of policy disagreement alone;76 that Bowsher, where Congress 

claimed for itself the power to remove an officer for inefficiency, neglect, or 

malfeasance,77 determined that the removal standard was “very broad” and 

“could sustain removal of a Comptroller General for any number of actual or 

perceived transgressions of the legislative will.”78 And looking to dictionary 

definitions from the time the “inefficiency, neglect of duty, or malfeasance” 

standard was first adopted, as well as the present day, “inefficiency” in 

particular bears a capacious definition capable of encompassing policy 

disagreement.79 This is “a construction of the statute” that is “fairly possible.”80

It follows that even if this were not the only fair construction of the standard, 

its breadth welcomes constitutional avoidance, an anodyne of patience to await 

a decision that may be necessary, if at all, at a later time when events may 

have brought light to the issue or see them fall into a bin of lost currency. 

75 Morrison, 487 U.S. at 682

76 See generally PHH, 881 F.3d at 125–37 (Griffith, J., concurring in judgment).

77 Id. at 129.

78 Id. (quoting Bowsher, 478 U.S. at 729).

79 Id. at 131–34.

80 Ashwander v. Tenn. Valley Auth., 297 U.S. 288, 348 (1936) (Brandeis, J., concurring) 

(quoting Crowell v. Benson, 285 U.S. 22, 62 (1932)).

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V.

The President can remove the CFPB Director only for “inefficiency, 

neglect of duty, or malfeasance in office,” a broad standard repeatedly approved 

by the Supreme Court. That alone is enough to decide this case. If there is any 

threat of undue concentration of power, the Office of President is its 

beneficiary. 

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JERRY E. SMITH, Circuit Judge, dissenting:

We are not the first court to address a constitutional challenge to the 

CFPB, nor will we be the last.1 When the District of Columbia Circuit took a

spin, then-Judge Kavanaugh urged that the issue ultimately turns on one concept: power.2 Right he was. This case presents a fundamental question about 

governmental authority: May Congress vest enormous executive power in one 

person who does not answer to the President or, indeed, to anyone else? More 

on that to come.

But Justice Kavanaugh was right in a way that not even he could have 

foreseen. Here at the Fifth Circuit, the latest test of the CFPB’s legitimacy has 

deteriorated into a regrettable commentary on another form of power: the 

asserted prerogative of two judges to abandon en banc precedent they dislike. 

In Collins v. Mnuchin,3 the en banc court confronted a challenge to the 

Federal Housing Finance Agency (“FHFA”)—an entity that, in all relevant 

respects, is indistinguishable from the CFPB. We concluded, by a strong 12–4 

margin, that the FHFA’s structure was unconstitutional. Yet today, the majority holds the very opposite for the CFPB, basing its naked disagreement with 

the en banc court on the flimsiest of grounds. Indeed, one judge in the majority

dissented in Collins but now enacts his disagreement into law. The other judge 

did not participate in Collins, but even a skim of his “paean to the administrative state”4 reveals that he too would have dissented.

1 See CFPB v. Seila Law LLC, 923 F.3d 680 (9th Cir.), cert. granted, 140 S. Ct. 427 

(2019) (argued Mar. 3, 2020).

2 See PHH Corp. v. CFPB, 881 F.3d 75, 166 (D.C. Cir. 2018) (en banc) (Kavanaugh, J., 

dissenting).

3 938 F.3d 553 (5th Cir. 2019) (en banc), petition for cert. filed (U.S. Sept. 25, 2019) 

(No. 19-422).

4 Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 499 (2010).

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Collins winds up in the dustbin because two judges say it should. At one 

time, those judges thought it beyond the pale “to rely on strength in numbers 

rather than sound legal principles in order to reach their desired result in [a]

specific case.”5 Now, they suddenly discover that stare decisis is for suckers.6

This case is absolutely about power. The majority declares open season 

on the en banc court. With great respect for my two dedicated colleagues, who 

would not purposefully undermine the rule of law, I dissent.

I. THE CFPB

Congress turned to a familiar tool in response to the 2008 financial 

crisis—a new independent bureau. Enter the CFPB. Title X of the Dodd-Frank 

Wall Street Reform and Consumer Protection Act7 established the Bureau and

housed it within the Federal Reserve System (the “Fed”). Congress exhorted 

the CFPB to “regulate the offering and provision of consumer financial products or services under” federal law and “ensur[e] that all consumers have 

access to” “fair, transparent, and competitive” markets for those products. 

12 U.S.C. §§ 5491(a), 5511(a). To carry out its roving commission, Congress 

gave the Bureau a lot of muscle. It exercises some form of all three govern5 June Med. Servs., L.L.C. v. Gee, 913 F.3d 573, 574 (5th Cir.) (Dennis, J., joined by

Higginbotham, Graves, and Higginson, JJ., dissenting from the denial of rehearing en banc), 

cert. granted, 140 S. Ct. 35, and cert. granted, 140 S. Ct. 35 (2019) (argued Mar. 4, 2020).

6 Yet my colleagues are well aware of this court’s steady invocation of stare decisis

that we call the rule of orderliness, which prohibits three-judge panels from sidestepping the 

rulings of previous panels and, more importantly, en banc decisions. See, e.g., Ladd v. Livingston, 777 F.3d 286, 289 (5th Cir. 2015) (Higginbotham, J.) (“Under our circuit’s rule of orderliness, these decisions, involving the application of essentially the same facts to the same law, 

control our own, and require us to deny the [requested] relief.”); United States v. CastilloRivera, 853 F.3d 218, 227 (5th Cir. 2017) (en banc) (Higginbotham, J., concurring) (“To go 

forward and reduce the jurisprudence of stare decisis to a detailed code confected by case-bycase determination of rules apart from our well-developed principles of stare decisis would 

serve disorder, not order.”). 

7 Pub. L. No. 111-203, 124 Stat. 1376, 1955 (2010).

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mental functions: executive, legislative, and judicial.8 

A. Powers

Start with the CFPB’s rulemaking authority. It may prohibit any practice it considers “unfair, deceptive, or abusive” “in connection with any transaction with a consumer” in the consumer-financial space.9 The power to proscribe “abusive” practices appears new in the history of consumer-protection 

law.10 And it applies in an impressive number of contexts, given that the 

CFPB’s rulemaking ambit includes mortgages, consumer loans, and credit 

cards, among other products. See id. § 5481(12).

The CFPB also can adjudicate disputes arising under the many laws that 

it “is authorized to enforce” and any rules that the Bureau prescribes. Id.

§ 5563(a)(1), (2). In other words, the CFPB can write the law and then hear 

disputes under it.11

But maybe most significant is the Bureau’s power to enforce consumer8 Under the infamous legal fiction that justifies the non-delegation doctrine, the CFPB 

does not explicitly wield legislative power. But see Whitman v. Am. Trucking Ass’ns, Inc., 

531 U.S. 457, 488 (2001) (Stevens, J., concurring in part and in the judgment) (“[I]t would be 

both wiser and more faithful to what we have actually done in delegation cases to admit that 

agency rulemaking authority is legislative power.” (quotation marks removed)).

9 12 U.S.C. § 5531(b) (emphasis added). The statute, see id. § 5531(c), (d), provides 

further color as to what the Director may permissibly deem “unfair” or “abusive.”

10 See PHH, 881 F.3d at 145 (Henderson, J., dissenting) (“The agency also has expansive new powers under Title X to investigate, charge, adjudicate and penalize . . . a consumerconnected act or practice the agency defines as unfair, deceptive, or abusive.” (quotation 

marks removed)); Todd Zywicki, The Consumer Financial Protection Bureau: Savior or Menace?, 81 GEO. WASH. L. REV. 856, 918 (2013) (“The term ‘abusive,’ as used in this context, 

appears to be an entirely novel term with no forerunners in any prior federal or state statute 

or regulation.”).

11 Cf. Gundy v. United States, 139 S. Ct. 2116, 2148 (2019) (Gorsuch, J., dissenting) 

(“[W]hile Congress can enlist considerable assistance from the executive branch in filling up 

details and finding facts, it may never hand off to the nation’s chief prosecutor the power to 

write his own criminal code.”).

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protection laws. See id. § 5481(12). For years, legislators clamored for a body 

that might centralize and streamline enforcement of federal consumer protection.12 The CFPB was the answer. Congress transferred to it the right to 

administer eighteen statutes (in addition to Title X itself) that seven different 

agencies had previously overseen.13 

In brandishing its enforcement authorities, the Bureau retains all the 

accoutrements of executive power. It can bring enforcement actions in federal 

court and before administrative law judges. Id. § 5564. It may issue subpoenas 

for testimony or documents, enforceable by contempt. Id. § 5562(b). It can

make civil investigative demands and file petitions for their enforcement in 

federal court. Id. § 5562(e). And it may seek a smorgasbord of penalties, 

including rescission of contracts, restitution, disgorgement, damages, and even 

limits on the defendant’s activities and functions. Id. § 5565(a)(2).

B. Structure

All of that power is bestowed on one lucky person. Meet the Director of 

the CFPB, whom the President appoints with the Senate’s advice and consent. 

Id. § 5491(b)(1)–(2). After her confirmation, the Director is largely insulated 

from the political branches. But the President still has two avenues for oversight. Most significantly, he retains the power to fire the Director, id.

§ 5491(c)(3)—but that authority exists only in neutered form. The Director’s 

12 See, e.g., Elizabeth Warren, Unsafe at Any Rate, DEMOCRACY (Summer 2007), 

perma.cc/52X3-892V; see also Zywicki, supra, at 857–58 (“[T]he system of consumer financial 

protection needed streamlining and reform even before the onset of the financial crisis. A 

patchwork of agencies covered different aspects of the financial system and all of them tended 

to focus on safety and soundness issues rather than consumer protection.”).

13 See PHH, 881 F.3d at 80–81; see also 12 U.S.C. § 5481(12) (listing eighteen statutes 

transferred to the CFPB’s jurisdiction). The seven agencies were the Federal Reserve, Office 

of the Comptroller of the Currency, Office of Thrift Supervision, Federal Deposit Insurance 

Corporation, National Credit Union Administration, Department of Housing and Urban 

Development, and Federal Trade Commission (“FTC”). 12 U.S.C. § 5581(b).

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five-year tenure14 is guaranteed so long as she does not slack into “inefficiency, 

neglect of duty, or malfeasance in office.”15 Separately, the Financial Stability 

Oversight Council (“FSOC” or “Council”) affords the President a limited means 

to review the CFPB’s rulemakings. See id. § 5321.

As for Congress, the CFPB’s structure similarly permits little room for 

oversight. The Bureau is not funded with congressional appropriations; it 

instead draws from the Fed’s coffers. See id. § 5497. The Director may request 

the amount she reasonably needs, and, so long as the request doesn’t exceed 

twelve percent of its budget, the Fed can’t turn the Director down. Id.

§ 5497(a)(1), (2)(A)(iii). If the request exceeds that upper limit, the CFPB must 

ask Congress for the excess. Id. § 5497(e).

II. EVALUATING REMOVAL RESTRICTIONS

The defendants assert that various features of the CFPB’s design combine to violate the separation-of-powers doctrine. They complain that the President must be able to remove the Bureau’s single Director at will. Between the 

Supreme Court and this tribunal, much has been said about the power of Congress to interfere with the President’s authority to remove his subordinates.

A. Removal at the Supreme Court

The Constitution assigns “[t]he executive Power” to “a President of the 

United States of America,” U.S. CONST. art. II, § 1, cl. 1, and it exhorts the 

President to “take Care that the Laws be faithfully executed,” id. art. II, § 3. 

14 12 U.S.C. § 5491(c)(1). The five-year term can extend a bit longer pending confirmation of a new Director. See id. § 5491(c)(2). 

15 Id. § 5491(c)(3). That is standard language for independent agencies. See Lawrence 

Lessig & Cass R. Sunstein, The President and the Administration, 94 COLUM. L. REV. 1, 110 

(1994). The same applies to removal of the commissioners of the FTC, for example. See 

15 U.S.C. § 41; see also Humphrey’s Ex’r v. United States, 295 U.S. 602, 629 (1935) (upholding 

that removal restriction).

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Those provisions have inspired plenty of debate about the scope of executive 

authority. But the Supreme Court has made at least two things certain.

The first is that the President retains the power to remove executive officers. See Free Enter. Fund, 561 U.S. at 483. That removal power is justified 

on two related theories: on the one hand, that it inheres in the nature of executive power; and, on the other, that the President must be able to remove 

subordinates if he is to execute the law.16

The second is that the President’s removal power has limits. Except 

when it sits in impeachment, Congress cannot assume for itself a role in 

removal.17 But it may, “under certain circumstances, create independent 

agencies run by principal officers appointed by the President, whom the President may not remove at will but only for good cause.” Id. The Supreme Court 

has upheld the constitutionality of powerful, multimembered agencies whose 

leaders have protection from termination.18 It also has sustained the power of 

Congress to grant removal protections to a solo independent counsel of limited 

authority.19 It has not, however, present Term excluded,20 confronted an 

agency like the CFPB, with both tremendous power and a solitary leader.

The inquiry for analyzing removal constraints is settled. Initially, the 

16 See Free Enter. Fund, 561 U.S. at 484; Steven G. Calabresi & Saikrishna B. Prakash, The President’s Power To Execute the Laws, 104 YALE L.J. 541, 597–98 (1994).

17 See Myers v. United States, 272 U.S. 52 (1926) (holding unconstitutional a scheme 

in which Congress required its advice and consent before the President could remove postmasters); Bowsher v. Synar, 478 U.S. 714 (1986) (holding unconstitutional Congress’s assignation of executive power to the Comptroller General, an officer whom Congress had the 

power to remove).

18 See Humphrey’s Ex’r, 295 U.S. at 629 (FTC); Wiener v. United States, 357 U.S. 349 

(1958) (War Claims Commission).

19 See Morrison v. Olson, 487 U.S. 654 (1988).

20 See Seila Law, 923 F.3d at 682.

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Court asked whether the agency exercised quasi-judicial, quasi-legislative, or 

quasi-executive power. See Humphrey’s Ex’r, 295 U.S. at 624. But the Court 

later adopted a more “considered view.” Morrison, 487 U.S. at 689. In Morrison, id. at 689–90, the Court turned the spotlight on the degree to which the

restrictions intrude on executive authority. Indeed, when Congress tries to 

limit the President’s power to remove an executive official, we ask whether the 

legislators have “unduly trammel[ed] on executive authority” and “interfere[d] 

impermissibly with [the President’s] constitutional obligation to ensure the 

faithful execution of the laws.” Id. at 691, 693. That is, we decide whether 

Congress has unduly insulated the officer from the President’s oversight.21

B. Collins v. Mnuchin (en banc)

The CFPB’s single-Director, removal-protected structure is rare in 

American history.22 But it is not unfamiliar to this circuit’s en banc court. Just 

last year, in Collins v. Mnuchin,23 we ruled on a constitutional challenge to the 

FHFA, an agency whose structure is a near-perfect image. Collins is hot off 

the press but apparently deserves to be ignored.

1.

On to Collins. Congress charged the FHFA with overseeing two impor21 See Free Enter. Fund, 561 U.S. at 501 (analyzing a public accounting board’s degree 

of “insulation from the President”).

22 See PHH, 881 F.3d at 178 (Kavanaugh, J., dissenting); Zywicki, supra, at 899; see 

also Free Enter. Fund, 561 U.S. at 505 (“Perhaps the most telling indication of the severe 

constitutional problem with the [agency] is the lack of historical precedent for this entity.”). 

The D.C. Circuit uncovered only three other similar agencies: the Social Security Administration, Office of Special Counsel, and FHFA, the last of which came into being only in 2008. 

See PHH, 881 F.3d at 174 (Kavanaugh, J., dissenting).

23 896 F.3d 640 (5th Cir.) (per curiam), reinstated in relevant part on reh’g en banc, 

938 F.3d 553 (5th Cir. 2019) (en banc), petition for cert. filed (U.S. Sept. 25, 2019) (No. 19-422). 

The en banc court reinstated the panel’s constitutional analysis. See Collins, 938 F.3d at 588. 

So I refer interchangeably to the two decisions as “Collins.”

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tant government-sponsored entities: the Federal National Mortgage Association (“Fannie”) and the Federal Home Loan Mortgage Corporation (“Freddie”). 

Collins, 938 F.3d at 563. The FHFA is led by a single Director, serving a fiveyear term, whom the President can fire only “for cause.” See 12 U.S.C. 

§ 4512(a), (b)(2). Congress does not fund the FHFA with appropriations; 

instead, the agency assesses charges on the entities it regulates. See 

id. § 4516(a). An oversight board advises the agency as it carries out its duties. 

See id. § 4513a(a).

The FHFA wields its fair share of power. It issues rules, orders, and 

guidelines to ensure Fannie’s and Freddie’s “sound operations.”24 The agency 

can sue Fannie and Freddie for breaking the law or engaging in unsound practices, can impose penalties, and can order the companies to cease and desist

and to remedy violations.25

But, most potently, the FHFA can name itself conservator or receiver for 

Fannie or Freddie if either becomes critically undercapitalized. See id. § 4617. 

Once so appointed, the FHFA is empowered to conduct all aspects of the companies’ business, perform all their functions, preserve or sell their assets, enter 

into contracts, collect obligations, and so much more.26

2.

In assessing the FHFA’s structure, the en banc court in Collins did not 

view the agency’s various design features in isolation. Instead, we assessed 

the “combined effect” of several of them to determine whether they insulated 

24 Collins, 938 F.3d at 565; see 12 U.S.C. §§ 4513, 4526(a).

25 Collins, 938 F.3d at 565; see 12 U.S.C. §§ 4631(a)(1), (c), 4632(e), 4635, 4636, 4641.

26 Collins, 938 F.3d at 578; see generally 12 U.S.C. § 4617.

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the Director too deeply from oversight.27 The result? Twelve of the sixteen 

judges agreed: The FHFA cannot withstand constitutional scrutiny.28

The first two features were the most significant. A solo Director leads

the agency, and she is not removable at will.29 We recognized that the removal 

restriction is not enough, standing alone, to violate the Constitution. Collins, 

896 F.3d at 667. Yet it undoubtedly “dulls an important tool for supervising 

the FHFA.” Id. at 666 (footnote removed). 

The single-Director structure is also an insulating innovation.30 To date, 

Congress has given the overwhelming majority of independent agencies multimembered boards. Id. at 667. The President can influence those agencies by 

designating their chairs and removing them at will from that position. Id. The

FHFA is different. A President can find himself “stuck for years” with a Director selected by a predecessor and opposed to the current administration’s

policies. Id. at 668. Because of its solo Director, the FHFA also lacks bipartisan balance, an otherwise standard feature among agencies. See id. Balanced agencies enable the President to “secure a majority . . . within the first 

two years of his term.” Id. Not so for the FHFA.

The agency is also insulated from Congress, which, in operation, further 

27 Collins, 896 F.3d at 666; see Eric Pearson, A Brief Essay on the Constitutionality of 

the Consumer Financial Protection Bureau, 47 CREIGHTON L. REV. 99, 118 (2013) (“It is the 

convergence of these factors rather than any single factor that brings the issue of constitutionality to the fore. Even if some independence from checks and balances is appropriate or 

even preferable as a matter of policy, the question in this context is whether the simultaneous 

presence of all of these immunities makes the CFPB too independent.”).

28 See Collins, 938 F.3d at 562 (showing eight judges concurring in Judge Willett’s 

majority opinion); id. at 591 n.1 (showing three additional judges concurring in the conclusion 

that the FHFA was structured unconstitutionally).

29 See 12 U.S.C. § 4512(a), (b)(2); Collins, 896 F.3d at 666–68.

30 See Collins, 896 F.3d at 667; 12 U.S.C. § 4512(a).

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reduces the President’s oversight. See id. at 668–69. Indeed, because the 

FHFA does not rely on appropriations, the President loses another tool for 

overseeing it: namely, his power to veto spending bills related to the agency 

and to submit annual budgets for Congress’s consideration. Id.

The final feature is the lack of any robust vehicle for executive-branch 

oversight. Id. at 669. Though the Federal Housing Finance Oversight Board 

advises the Director, 12 U.S.C. § 4513a(a), the Board can’t “require the FHFA 

or Director to do anything,” Collins, 896 F.3d at 669. Thus, the merging of 

several features—solo Director, removal protections, partisanship, abnormal 

funding, and lack of supervision—results in an agency too sequestered for the 

Constitution to bear. Id. at 674.

III. COLLINS (EN BANC) CONTROLS

The CFPB and FHFA are sister institutions. Only a judge who plays 

“semantic games of reformulation and hair splitting in order to escape the force 

of a fairly resolved issue” can conclude, as a matter of constitutional law, that 

the agencies are sufficiently different.31 Quite the contrary. The only material 

distinctions magnify—not reduce—the extent of the CFPB’s infirmity.

A. Same Structure

First, consider the agencies’ twin structures. Both are captained by a 

lone Director, with a resulting lack of bipartisan balance.32 Each Director 

serves a five-year term and has removal protections for her duration in office.33 

31 Bhandari v. First Nat. Bank of Commerce, 829 F.2d 1343, 1352 (5th Cir. 1987) (en 

banc) (Higginbotham, J., concurring), cert. granted, judgment vacated, 492 U.S. 901 (1989), 

and opinion reinstated, 887 F.2d 609 (5th Cir. 1989) (per curiam).

32 See 12 U.S.C. §§ 4512(a), 5491(b)(1). 

33 See id. § 5491(c)(1), (3) (CFPB); id. § 4512(b)(2) (FHFA).

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And each agency is funded outside congressional appropriations.34 The Bureau

thus enjoys the identical structural insulation that we held unlawful in Collins. 

The glove fits.

B. More Power

The CFPB’s structure mirrors the FHFA, but the breadth of its power is 

far greater. That is important, because the scope of the CFPB’s authority is a 

crucial variable in the constitutional equation.35 We must analyze the degree 

to which a removal restriction interferes with the President’s obligation to 

execute the law. Morrison, 487 U.S. at 691–92. That necessarily invokes an 

inquiry into the agency’s powers, because what an independent officer receives, 

the President loses.36

The interference with the President’s duties is widespread and punish34 See id. §§ 4516(a), 5497. It’s true that if the CFPB needs more money than the Fed’s 

budget can handle, it must seek extra rations from Congress, see id. § 5497(e), and that the 

FHFA’s statute had no similar provision, see id. § 4516. But that difference is insignificant, 

given the Fed’s hefty budget. Indeed, in recent years, the CFPB has needed much less funding than that to which it was entitled. See CFPB, Fiscal Year 2019: Annual Performance 

Plan and Report, and Budget Overview 7 (Feb. 2019), https://perma.cc/RLH2-HTHH. And 

the CFPB only needs to seek any extra funds from Congress, not the whole lot. See 12 U.S.C. 

§ 5497(e)(1).

35 See, e.g., Morrison, 487 U.S. at 691 (emphasizing, in upholding removal restriction, 

the independent counsel’s “limited jurisdiction and tenure” and lack of “significant administrative authority”). My focus on the scope of the agency’s power does not ignore the tradition 

of independence for financial regulators, a theme amply reviewed in PHH, 881 F.3d at 91–

92, 102. That such independence is traditional does not mean it passes muster in every case. 

Indeed, the Public Company Accounting Oversight Board was a financial regulator, yet the 

Court found its removal protections unconstitutional. See Free Enter. Fund, 561 U.S. at 508. 

Congress has scarcely given as much power to an independent financial regulator as it has 

to the CFPB, let alone housed all of that power in one individual. That triggers the central 

constitutional question.

36 See 12 U.S.C. § 5512(b)(4)(A) (granting the CFPB nearly exclusive authority to issue 

rules under the laws it administers); see also PHH, 881 F.3d at 172 (Kavanaugh, J., dissenting) (pointing out that, within her jurisdiction, the CFPB Director has more power than does

the President).

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ing. It dominates anything Congress did in creating the FHFA, which is saying 

something. Indeed, the FHFA’s ability to take over Fannie and Freddie is a

considerable source of authority, and the agency wields multiple governmental

powers. But the FHFA’s jurisdiction still pales. That agency supervises two 

entities; the CFPB regulates a major chunk of American commerce.37 Congress 

handed the Director the keys to eighteen consumer-protection laws, including 

such landmark statutes as the Truth in Lending Act, the Fair Debt Collection 

Practices Act, and the Fair Credit Reporting Act. See 12 U.S.C. § 5481(12). 

Her powers touch banking, home finance, credit cards, and consumer loans. 

See id. She “is the regulator of first resort and the primary law enforcement 

authority for a vital sector of our economy.” Free Enter. Fund, 561 U.S. at 508.

And the Director can exercise those powers unilaterally, because she 

alone is at the helm. Indeed, the Director’s solitary status not only contributes 

to her insulation; it also magnifies her powers. 

There is a reason, after all, that our Founders vested the executive power 

in one President. See U.S. CONST. art. II, § 1, cl. 1. They recognized that a 

single magistrate could act with greater energy, speed, and effectiveness in 

carrying out his duties.38 “The first thing which strikes our attention is, that 

the executive authority, with few exceptions, is to be vested in a single magistrate.”39 “Decision, activity, secrecy, and d[i]spatch, will generally characterize 

37 See Zywicki, supra, at 874 (“[T]he CFPB director performs an enormous policymaking function by controlling the flow and terms of consumer credit in the American 

economy.”).

38 See, e.g., THE FEDERALIST NO. 70, at 363 (Hamilton) (Liberty Fund ed. 2001) (“That 

unity is conducive to energy, will not be disputed.”); GORDON S. WOOD, THE CREATION OF THE 

AMERICAN REPUBLIC: 1776–1787, at 430–33 (1998) (describing the Founding generation’s 

growing conviction, during the years leading up to the adoption of the federal Constitution, 

that legislative abuses needed to be curbed in part by strengthening and unifying the 

executive power).

39 THE FEDERALIST NO. 69, at 355. Although today we use the word “magistrate” to 

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the proceedings of one man, in a much more eminent degree than the proceedings of any greater number; and in proportion as the number is increased, 

these qualities will be diminished.”40 “Those politicians and statesmen who 

have been the most celebrated for the soundness of their principles, and for the 

justness of their views, have declared in favour of a single executive . . . .”41 

“[A]ttaching ourselves purely to the dictates of reason and good sense, we shall 

discover much greater cause to reject, than to approve, the idea of plurality in 

the executive . . . .”42 

The same logic demonstrates that the Director’s solo status increases her 

powers and therefore also interferes more with the President’s. “Wherever two 

or more persons are engaged in any common enterpri[s]e or pursuit, there is 

always danger of difference of opinion.”43 The Director faces no such danger. 

Unencumbered by the need to cobble together a majority, the Director acts with 

greater speed and scope.44 The result is more for her to do and less for the 

President. Unitary power is more explosive than power diffused.45

refer to a judge, the Founders assigned that term, as well, to executive officers. See, e.g., THE 

FEDERALIST NO. 48, at 257 (Madison) (referring to “executive magistrates” and “the executive 

magistracy” and “an hereditary magistrate” when discussing the role of the President under 

Article II).

40 THE FEDERALIST NO. 70, at 363; see Myers, 272 U.S. at 116 (“The debates in the 

Constitutional Convention indicated an intention to create a strong Executive, and after a 

controversial discussion the executive power of the Government was vested in one person[.]”).

41 THE FEDERALIST NO. 70, at 363.

42 Id. at 364.

43 Id.

44 See PHH, 881 F.3d at 184 (Kavanaugh, J., dissenting) (“A multi-member independent agency can go only as far as the middle vote is willing to go.”); Zywicki, supra, at 878 

(observing that the CFPB’s single-Director structure eliminates “collegial decisionmaking,” 

resulting in “tunnel vision”).

45 Alexander Hamilton believed as much. See THE FEDERALIST NO. 70 (Hamilton), 

at 366 (arguing against an executive council and in favor of a single magistrate, because “the 

mere diversity of views and opinions” in the former “would alone be sufficient to tincture the 

exercise of the executive authority with a spirit of habitual feebleness and dilatoriness”). 

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In exercising unilateral authority, very little constrains the Director. As

one example, she has the ability—subject only to narrow limits in 12 U.S.C. 

§ 5531(c) and (d)—to prohibit any practice in consumer finance that she deems 

“unfair, deceptive, or abusive.” Id. § 5531(b). The Director already has jurisdiction over eighteen statutes designed to protect against various forms of 

abuse and deception. See id. § 5481(12). But, in section 5531, her authorities 

extend yet further. Even casual observers of human nature will note its genius 

in plotting creative ways to deceive. Consumer finance is no exception. The

CFPB’s powers extend as far as the imagination will take them.

C. Inconsequential Differences

The only relevant structural difference between the agencies—the 

FSOC—is overtly pedestrian. Undeterred, the majority stubbornly asserts

that the FSOC’s presence somehow makes the CFPB accountable. Not so.

The FSOC’s primary authority consists in its narrowly circumscribed 

ability to veto the CFPB’s rulemakings. See id. § 5513(a). The Council’s ten 

voting members include the Secretary of the Treasury, the Comptroller of the 

Currency, a member appointed by the President, and the chairs of seven independent agencies, including the CFPB itself and the FHFA. Id. § 5321(b)(1). 

The President appoints each of those to his or her respective office.46 They may 

exercise the veto only by a supermajority vote and only where the rule threatens “the stability of the financial system of the United States.” Id.

§ 5513(c)(3)(A), (B)(ii). 

The majority accurately notes that Collins relied on the FSOC in pointing out differences between the FHFA and the CFPB.47 That, the majority

46 See PHH, 881 F.3d at 120 n.3 (Wilkins, J., concurring).

47 See Collins, 896 F.3d at 669–70, 672–74.

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brags, shows that Collins could not possibly control. But it is hard to think of 

a better example of dictum, defined as that which “could have been deleted 

without seriously impairing the analytical foundations of the holding,”48 than 

the en banc court’s discussion of the CFPB. The Bureau’s constitutionality was 

not before it.

“We are not bound by dicta, even of our own court.” United States v. 

Becton, 632 F.2d 1294, 1296 n.3 (5th Cir. 1980). Distinguishing the CFPB was 

plainly not a pillar upon which Collins stood or fell, but only an observation by 

some judges to show that they were focusing on the particulars of the agency 

at issue. To suggest—rightly or wrongly—that one agency may be less constitutionally infirm than another is not to say that one is sick and the other is 

well. 

Today’s majority thus tiptoes around Collins’s holding but drives a truck 

through its dictum. That is how you turn an “analysis on its head.” Wood v. 

Collier, 836 F.3d 534, 541 (5th Cir. 2016) (Higginbotham, J.).

The FSOC cannot save the CFPB from its hour of trouble, no matter how 

badly the majority wishes it were so. It is hard to imagine an oversight council 

with less capacity to oversee. 

To start, the FSOC can set aside only the Director’s rulemakings and has 

no authority over the agency’s enforcement actions or adjudications.49 That 

matters. It is a foundational principle of administrative law that agencies can

forgo rulemaking and instead make substantive policy by adjudicating and 

48 Netsphere, Inc. v. Baron, 799 F.3d 327, 333 (5th Cir. 2015) (Higginbotham, J.) (quoting United States v. Segura, 747 F.3d 323, 328 (5th Cir. 2014)).

49 See 12 U.S.C. § 5513(a); see also PHH, 881 F.3d at 159 (Henderson, J., dissenting) 

(“As far as the Council is concerned, then, the CFPB can break the law or abuse its power as 

long as it does so (1) in an enforcement action or (2) in a regulation that does not threaten 

national financial ruin.”).

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bringing enforcement actions.50 Some do almost all of their policymaking via 

those means,51 and the CFPB has taken advantage of its Chenery II prerogatives.52 The FSOC can do nothing about any of it. Its lack of authority over 

adjudications and enforcement leaves a gaping hole in its supposed oversight 

of the CFPB’s policymaking.

And even within the rulemaking category, the Council must defeat significant procedural and substantive hurdles. The main procedural one is the 

50 See SEC v. Chenery Corp. (“Chenery II”), 332 U.S. 194, 203 (1947) (“[T]he choice 

made between proceeding by general rule or by individual, ad hoc litigation is one that lies 

primarily in the informed discretion of the administrative agency.”); see also Kevin M. Stack, 

The Constitutional Foundations of Chenery, 116 YALE L.J. 952, 1000 (2007) (“[It is] wellestablished doctrine (established, indeed, by Chenery II) that an agency generally has broad 

discretion to choose how to implement a statutory grant of power, whether through rulemaking or through adjudication.”); Neomi Rao, Removal: Necessary and Sufficient for Presidential Control, 65 ALA. L. REV. 1205, 1250 (2014) (“Often a statute will leave an agency with 

discretion about whether to proceed through rulemaking or adjudication and the Court has 

held that such discretion rests with the agency.”).

51 The NLRB is the most notorious example. See, e.g., Charlotte Garden, Toward 

Politically Stable NLRB Lawmaking: Rulemaking vs. Adjudication, 64 EMORY L.J. 1469, 

1471 (2015) (“For decades now, academics and courts have been calling on the [NLRB] . . . to 

use its rulemaking authority, rather than relying nearly exclusively on announcing legal 

principles through adjudication.”).

52 Indeed, the CFPB has taken heat for engaging in “regulation by enforcement” 

instead of issuing rules. Recall that its power to prohibit consumer-finance practices that are 

“abusive” is new in consumer protection. See Zywicki, supra, at 918. Title X provides some 

color as to what “abusive” means, see 12 U.S.C. § 5531(d), but many have called for a rulemaking to provide more detail, see, e.g., Daniel Press, Consumer Financial Protection Bureau 

Should Define ‘Abusive’, COMPETITIVE ENTER. INST. (June 5, 2019), https://perma.cc/6T8US8RV. 

The clamor was loud enough that Acting Director Mick Mulvaney testified that the 

Bureau would cease its practice of “regulation by enforcement.” He explained that “people 

will know what the rules are before the Bureau accuses them of breaking those rules.” The 

Consumer Financial Protection Bureau’s Semi-Annual Report to Congress: Hearing Before the 

Comm. on Banking, Hous., and Urban Affairs, U.S. Senate, 115th Cong. 46 (April 12, 2018) 

(statement of Mick Mulvaney, Acting Director), available at https://perma.cc/V6UT-3FYS. 

The Bureau provided those seeking clarity a half victory, as it issued a policy statement that 

purports to “provide[] a framework for the Bureau’s exercise of its supervisory and enforcement authority to address abusive acts or practices.” See Statement of Policy Regarding 

Prohibition on Abusive Acts or Practices, CFPB (Jan. 24, 2020), available at

https://perma.cc/JXA5-ALTE.

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requirement of a supermajority vote. 12 U.S.C. § 5513(c)(3)(A). One of the 

voting members is the Director, and presumably she is unlikely to cast a ballot 

wiping away a rule that she has just promulgated. Id. § 5321(b)(1)(D). In 

practical effect, then, a veto happens only if seven of nine are interested. 

The FSOC also cannot eliminate whatever rule it wishes. Instead, it can

step in only where the new law would endanger “the safety and soundness” of 

the entire national financial system. Id. § 5513(a). Such an “extreme test will 

rarely be satisfied in practice,”53 and if the Council misapplies it, judicial 

review is available.54 In sum, the FSOC’s veto can override only one of the 

CFPB’s three governmental functions (rulemaking), and, within that category, 

its power is procedurally and substantively restrained.

There’s more. If, as the majority claims, the FSOC’s presence makes the 

CFPB lawful when the FHFA was infirm, then it must be that the President 

can oversee the Council. But the President’s capacity to do so is predictably

scant.

For one, not every President will get to appoint each of its voting members, because some have terms longer than four years. See PHH, 881 F.3d at 

120 n.3 (Wilkins, J., concurring). And if the President disagrees with the 

FSOC’s exercise of discretion, he faces a difficult choice. If he wants to fire one

of its members, such will also require removing the member from his main

executive office, since nine of the ten members sit on the FSOC ex officio. 

12 U.S.C. § 5321(b)(1). 

53 Zywicki, supra, at 875; but see Rachel E. Barkow, Insulating Agencies: Avoiding 

Capture Through Institutional Design, 89 TEX. L. REV. 15, 75 (2010) (contending that “the 

threat of veto” is “a real one”).

54 See 12 U.S.C. § 5513(c)(8) (“A decision by the Council to set aside a regulation prescribed by the Bureau . . . shall be subject to review under [the Administrative Procedure 

Act].”).

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If, for example, the President is frustrated enough with the Chairman of 

the SEC’s performance on the FSOC to want to dismiss him, the President

must banish him from his perch atop the Commission to do so.55 That is a 

significant disincentive to removal. So, the FSOC’s oversight is narrowly 

cabined, and the President’s oversight of the overseer is itself narrowly constrained. The Council gives the President very little control.

In the final analysis, that Congress felt a need to create the FSOC

reveals what is ultimately the Bureau’s root problem: its vast, unaccountable

authority.56 Congress apparently worried that it had “created a monster by 

handing an agency breathtakingly broad powers and insulating the[ir] exercise.” Saxton v. FHFA, 901 F.3d 954, 963 (8th Cir. 2018) (Stras, J., concurring). 

The FSOC was Congress’s measured response: a body that can step in, but only 

when the stability of the entire economy hangs in the balance. The Council’s 

authority sweeps no further.

* * * * *

In Collins, the en banc court confronted a powerful agency that merged 

several insulating features, including a single Director, removal protection, 

and abnormal funding. Those features, we held, combined to violate the separation of powers. Twelve of sixteen agreed.

This three-judge panel now faces a much more powerful agency assembled in the very same way. Yet the two-judge majority holds the very opposite, 

55 See id. § 5321(b)(1)(E) (establishing that the Chairman of the SEC shall serve as a 

voting member on the FSOC).

56 See PHH, 881 F.3d at 160 (Henderson, J., dissenting) (“The fact that anyone mentions the Council’s narrow veto as a check is instead a testament to the CFPB’s unaccountable 

policymaking power.”).

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relying, as it must, on distinctions without a difference. So much for “the role 

of settled judicial rules.”57 The “patent refusal to apply well-established law in 

a neutral way is indefensible.”58

The judges in today’s majority desperately search for anything—

anything at all—that might excuse the obligation to apply the law. By counting 

to two, they succeed. Collins does not deserve the death sentence it now 

receives. I respectfully dissent.

57 June Med. Servs., 905 F.3d at 816 (Higginbotham, J., dissenting).

58 June Med. Servs., 913 F.3d at 585 (Higginson, J., dissenting from the denial of rehearing en banc) (quoting Whole Woman’s Health v. Hellerstedt, 136 S. Ct. 2292, 2331 (2016) 

(Alito, J., dissenting), as revised (June 27, 2016)).

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