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Removing Barriers Blog

PHH Argues the D.C. Court of Appeals Ruling Changing the CFPB Construct Should Stand
Posted January 29, 2017 by Chandler Schuette

On Friday, PHH filed its response to the CFPB’s request for a rehearing en banc in the landmark lawsuit in which the U.S. Court of Appeal for the D.C. Circuit found that the construct of the CFPB violates the constitution and that the Director of it can be removed “at-will”. PHH argued that the court should deny the petition for rehearing en banc.

Throughout its response, PHH argues that the ruling should stand because the panel’s separation-of-powers holding is rooted firmly in existing Supreme Court precedent and does not warrant further review.

The response states that, “The panel adopted that minimalist remedy instead of striking down the agency in light of its many constitutional failings, as PHH had urged. The panel’s conclusion, which horrifies the CFPB, simply means that an agency of the Executive Branch will be answerable to the Chief Executive. That is not en banc-worthy.”

The motion also argues that the court’s RESPA interpretation is consistent with the plain language and consistent with every other circuit to consider the issue. It states that, “That holding is plainly correct irrespective of the separation-of-powers ruling, and it presents no conflict of authority. On the contrary, the CFPB would ask the en banc Court to create a circuit split with every other court to have considered the proper scope of RESPA.”

This week several special interest groups, as well as Senate Banking Committee ranking member Sherrod Brown and House Financial Services Committee ranking member Maxine Waters, also filed petitions to join the PHH lawsuit.

A decision on whether the court will grant the hearing en banc is expected sometime in the next few weeks and CUNA is closely following the litigation.