Judge: Consumer Finance Agency Unconstitutionally Set Up


A New York federal judge says the U.S. government’s beleaguered consumer finance watchdog agency is unconstitutionally structured.

Judge Loretta Preska in Manhattan reached the conclusion about the Consumer Financial Protection Bureau in a written decision issued Thursday.

She said the composition of the bureau violates the Constitution’s separation of powers.

Her ruling conflicts with a January ruling by a nine-member panel of the U.S. Court of Appeals in Washington. A majority of that panel found that the agency director’s power is not excessive, and that the president should not have freer rein to fire that person.

Preska said she largely agreed with three dissenting judges in that ruling.

The conflicting decisions likely increase the possibility that the legal fight will land before the U.S. Supreme Court.