On Wednesday, November 30th, a collection of ten consumer advocacy groups filed an amicus brief asking the U.S. Court of Appeals for the D.C. Circuit to review its decision en banc in PHH Corp. v. Consumer Financial Protection Bureau (United States Court of Appeals, D.C. Cir., Case No. 15-cv-01177).


In that case, decided October 11th, 2016, a Court of Appeals panel ruled that the CFPB’s single-director structure is unconstitutional. The CFPB asked the D.C. Court of Appeals for a rehearing by filing a petition on Friday, November 18th, 2016.

The amicus brief filed on November 30th by consumer groups is supporting the CFPB’s petition and focuses on the question of whether the CFPB’s structure is constitutional.

The consumer groups that are signatories to the brief are Americans for Financial Reform, California Reinvestment Coalition, The Center for Responsible Lending, Consumer Federation of America, The Leadership Conference on Civil and Human Rights, The National Community Reinvestment Coalition, The National Consumer Law Center, The National Council of La Raza, United States Public Interest Research Group Education Fund, and the Woodstock Institute.

Per the brief:

"Amici curiae are ten non-profit organizations that advocate for consumer protection and civil rights. Each organization advocated for the CFPB’s creation and frequently appears before the Bureau to advocate for consumer interests. Amici and their members therefore have a strong interest in ensuring that the CFPB remains free from undue political and industry influence, and are uniquely well positioned to explain to the Court why the panel opinion, if left standing, will threaten the Bureau’s ability to protect consumers and imperil Congress’s goal of creating a regulatory environment free of undue industry influence."

In an earlier, related development, a group of 21 current and former federal lawmakers filed a similar amicus brief in support of the current CFPB structure. That group includes Senator Elizabeth Warren (former Special Advisor for the CFPB), Representative Nancy Pelosi (the U.S. House Minority Leader), Senator Sherrod Brown (ranking member of the Senate Banking Committee), Senator Harry Reid (outgoing Senate Minority Leader), and former Representative Barney Frank (co-author of the Dodd-Frank Wall Street Reform and Consumer Protection Act).

Additionally, the D.C. Circuit entered an order on November 23rd, 2016, directing PHH Corporation to file a response to the CFPB’s November 18th petition for rehearing en banc. The order requires PHH to file its response within 15 days, but the order also invites the Solicitor General to file a response expressing the views of the United States with no deadline.

insideARM Perspective

The filing by consumer groups, along with the previous filing by the group of legislators, showcases the importance of this case and high level of concern that currently exists among some about potential huge changes to the CFPB under a Trump administration.

The D.C. Circuit’s November 23rd ruling is also an interesting variable - given no deadline, the Solicitor General may choose to respond quickly, before President-Elect Trump’s inauguration, or wait to respond at some point after the change in administration.

Many have speculated about what effect Trump's election may have on leadership at the CFPB, including panelists at last week's Consumer Federation of America's Financial Services Conference. One of the panelists, George Mason University's J.W. Verret, said the relevant short term consequence is whether Cordray will stay for another year. Notwithstanding the PHH case, Trump could state a cause for dismissal, or he could site PHH and dismiss Cordray “at will.” Cordray could dispute either way. But the relevant Supreme Court precedent, the 1935 Humphrey’s Executor v. United States, sought back pay, not reinstatement. He predicted it would be unlikely that the goal of a Cordray dispute would be to get his job back.

insideARM will continue to monitor this crucial case.

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Tags: CFPB