Full Circuit Court to Hear Appeal of CFPB Structure Case

The full D.C. Circuit Court of Appeals today agreed to hear the appeal in PHH Mortgage v. Consumer Financial Protection Bureau, a closely watched case over whether the CFPB’s leadership structure — a single powerful director who cannot be removed at will by the president — is constitutional.

Today’s order also vacated an October 2016 ruling by a three-judge D.C. Circuit panel finding the structure unconstitutional and allowing the director’s removal not just “for cause” but at the president’s discretion — thus preventing President Trump from removing current director Richard Cordray before his term ends in 2018.

Oral arguments in the “en banc” review of the case will be heard by the D.C. Circuit on May 24. The case arose in 2015, when Cordray overruled an administrative law judge’s recommendation for a $6.5 million fine against mortgage lender PHH for allegedly requiring unlawful kickbacks from mortgage insurers in violation of the Real Estate Settlement Procedures Act. The American Bankers Association will continue to monitor the case as it progresses. For more information, contact ABA’s Thomas Pinder or Jonathan Thessin.