Removing Barriers Blog

PHH Decision Finds CFPB Structure Constitutional
Posted February 01, 2018 by Chandler Schuette

In a decision stemming from an en banc review of the PHH Corporation v. CFPB in the U.S. Court of Appeals in D.C., the CFPB’s single director structure was upheld. CUNA participated as an Amici in the en banc review, with a brief focused not on the constitutional issues. The decision was 7-4. 

In its ruling, the court held that the scope of the CFPB’s authority is not overbroad, because the CFPB’s powers are simply a conglomeration of powers previously housed in several other agencies, and because the CFPB’s authority is more cabined than many other independent agencies. Furthermore, the court concluded that the CFPB’s single-director structure is not historically novel. This reversed the previous decision that the CFPB Director should be able to be removed “at will” rather than the current standard. 

The Court of Appeals decision, however, vacated PHH’s 109 fine. 

Despite this most recent opinion, CUNA maintains that the best leadership structure for the CFPB is a multi-member commission, as recent leadership disputes have shown. A leadership commission would have avoided a lot of legal wrangling and provided certainty at an agency that has major influence over the financial services marketplace. 

CUNA will continue to follow any potential appeals in this case and other litigation about the CFPB’s leadership and structure.