Removing Barriers Blog

CFPB’s Constitutionality Called into Question in Another Lawsuit as Oral Arguments Approach in PHH
Posted May 18, 2017 by Chandler Schuette

The CFPB will have to defend its constitutionality yet again.  Earlier this week, the U.S. Court of Appeals for the Ninth Circuit gave D and D Marketing Inc. of California permission to appeal a November 2016 decision.   

The Ninth Circuit has asked D and D Marketing and the CFPB to address the following:  

  1. Does the structure of the Consumer Financial Protection Bureau (“CFPB”) violate Article II of the Constitution;  

  1. If the structure of the CFPB is unconstitutional, what is the proper remedy for this constitutional defect?” 

Last year, the U.S. Court of Appeals for the D.C. Circuit found that the CFPB’s structure was unconstitutional, however, this decision has since been vacated because the Court granted the CFPB’s petition for an “en banc" review.  Oral arguments in the “en banc” review will be held next week on May 24 in the D.C. District Court of Appeals, to reexamine a number of the findings from the fall 2016 decision. 

CUNA joined a number of other financial trade associations in signing an amicus brief for PHH v. CFPB.  The brief applauded the Court for the previous decision it rendered on the RESPA, statute of limitations, and retroactivity issues and discussing the need for regulatory certainty and due process, noting that RESPA is one of the most important statutes that govern the mortgage industry 

In addition to closely following both of these cases, CUNA has been advocating for a change to CFPB’s leadership structure to a 5-person commission, so that more voices are included in the debate. The change is one of the primary goals of CUNA’s bipartisan, pro-consumer Campaign for Common-Sense Relief.