The Consumer Financial Protection Bureau (CFPB) and Populus Financial Group agreed to stay the bureau’s enforcement action currently being heard in a Texas federal district court until the Fifth Circuit – which includes Texas – issues a mandate in Community Financial Services Association of America v. CFPB.
In the Fifth Circuit case, the appellate court determined that the CFPB’s funding structure was an unconstitutional violation of the Appropriations Clause and separation of powers.
The parties agreed to the stay because it “will promote efficient resolution of the case, as the final decision in CFSA will control the resolution of key issues” in Populus’ motion to dismiss. They further asserted that “waiting for the mandate in CFSA will simplify the issues in the case and potentially resolve the motion to dismiss outright.”
In its order granting the stay, the court also vacated all briefing deadlines on Populus’ motion to dismiss and denied its individual motion to stay as moot. The order directed the parties to file a joint report within 45 days of the conclusion of the stay that contains statements of how the parties wish to proceed.
The issuance of the mandate by the Fifth Circuit in the CFSA case is stayed automatically until the 45-day period for the CFPB to file a petition for rehearing has lapsed. If the CFPB files a petition, the mandate is further stayed until the petition is addressed. If no rehearing petition is filed by the CFPB or the petition is denied, the CFPB can seek a discretionary stay from the Fifth Circuit pending the outcome of its certiorari petition from the Supreme Court.