Democrats Defend CFPB’s Structure in Amicus Brief

A group of 39 current and former Democratic lawmakers submitted an amicus brief today in the case of PHH Mortgage v. Consumer Financial Protection Bureau, a closely watched case over whether the bureau’s leadership structure — a single powerful director who cannot be removed at will by the president — is constitutional.

The lawmakers defended the constitutionality of the sole directorship, holding that Congress has broad authority to shape the structure of the federal government and that it acted within this authority when structuring the bureau. The amicus brief was filed in advance of an “en banc” review of the case, which will be heard by the full D.C. Circuit Court of Appeals on May 24.

The case originally arose in 2015, when CFPB Director Richard 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. A three-judge D.C. Circuit panel ruled in October 2016 that the directorship was unconstitutional, but the ruling was vacated when the full court agreed to hear the appeal.

The American Bankers Association has long supported a consumer protection agency led by a bipartisan, five-member commission to balance independence and accountability while broadening perspectives and promoting checks and balances, and will continue to monitor the PHH case as the appeal proceeds.


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