Justices move on litigation funder’s problem to CFPB authority

  • Agency sued RD Legal over its litigation funding practices
  • Company argued CFPB cannot pursue case after Seila ruling

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(Reuters) – The U.S. Supreme Court on Monday declined to listen to a case difficult the U.S. Consumer Financial Protection Bureau’s authority to pursue enforcement actions introduced earlier than the courtroom held that the company’s construction was unconstitutional.

In a abstract order, the courtroom declined RD Legal Funding LLC’s petition.

The company and New York’s lawyer basic sued RD Legal Funding in 2017, saying its preparations to entrance money to individuals within the 9/11 sufferer compensation fund and NFL concussion settlements have been misleading and violated a state interest-rate cap.

The CFPB’s authority to carry that case and others got here into query final yr when the Supreme Court dominated in Seila Law LLC v. CFPB that the safety Congress afforded the CFPB director, who may solely be fired for trigger, was unconstitutional.

However, the courtroom left open the likelihood {that a} fireable director may assessment and ratify prior actions.

Since then, questions over the legality of ratification have held up older CFPB instances. By declining to listen to the RD Legal Funding case, the Supreme Court left judges to type them out.

Aside from difficult the CFPB’s authority, RD Legal Funding has argued its funding preparations weren’t loans ruled by shopper finance statutes however reasonably gross sales of authorized receivables.

A spokesperson for the CFPB declined to touch upon the case. An lawyer for the corporate didn’t instantly reply to a request for touch upon Monday.

The case is RD Legal Funding LLC v. Consumer Financial Protection Bureau, U.S. Supreme Court, No. 20-1758.

For RD Legal Funding: Anne Voigts of King & Spalding

For the CFPB: Kevin Friedl

Read extra:

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CFPB wields new SCOTUS ruling in enforcement instances

Jody Godoy

Jody Godoy stories on banking and securities regulation. Reach her at jody.godoy@thomsonreuters.com

REUTERS/Andrew Kelly