As its independent, single-director design continues to come under attack, the Consumer Financial Protection Bureau (CFPB) this week trumpeted a judge’s recent refusal to toss the agency’s allegations that student loan servicer Navient Corp. mishandled payments and its communications with borrowers, the National Law Journal reported today. A federal judge in Scranton, Pennsylvania, last week denied Navient’s motion to dismiss the CFPB lawsuit, in which the company contested the constitutionality of the bureau’s structure. The judge, Robert D. Mariani of the U.S. District Court for the Middle District of Pennsylvania, rejected arguments that the CFPB’s leadership structure—combined with an independent funding stream that does not subject it to congressional appropriations—violates the Constitution. The CFPB’s single-director design, “in and of itself, does not offend the Constitution,” Mariani wrote, pointing out that the Office of Special Counsel, Federal Housing Finance Agency and Social Security Administration have comparable leadership structures. The CFPB made sure Wednesday that Judge Mariani’s decision would not go unnoticed in Minnesota and Manhattan, where it’s facing similar motions to dismiss. In the U.S. District Court for the Southern District of New York, the CFPB joined with New York Attorney General Eric Schneiderman’s office to notify Judge Loretta Preska of Mariani’s ruling. Preska is presiding over the CFPB and the New York attorney general’s case against RD Legal Funding, a company accused of scamming 9/11 first responders and National Football League concussion victims out of millions of dollars by luring them into costly advances on settlement payouts.
