On Tuesday, November 29th, a group of 21 current and former federal lawmakers filed an amicus brief asking the U.S. Court of Appeals for the District of Columbia Circuit to review its decision en banc in the PHH Corp. v. Consumer Financial Protection Bureau case (United States Court of Appeals, D.C. Cir., Case No. 15-cv-01177).
In that case, on October 11, 2016, a Court of Appeals panel ruled that the CFPB's single director structure was unconstitutional. On Friday, November 18, 2016 the CFPB had filed a Petition with the Court of Appeals for the District of Columbia Circuit asking the court for a rehearing “en banc.” See the insideARM November 21, 2016 story.
The Amicus Brief supporting the CFPB Petition filed by the group focuses its attention on the part of the original decision that called the Consumer Financial Protection Bureau (CFPB) “unconstitutionally structured.”
The group includes Sen. Elizabeth Warren, Rep. Nancy Pelosi (the U.S. House Minority Leader), Sen. Sherrod Brown, (ranking member of the Senate Banking Committee), Sen. Harry Reid, (outgoing Senate Minority Leader) and former Rep. Barney Frank. All would be considered among the strongest supporters of the CFPB.
Per the brief:
“Amici are current and former members of Congress who are familiar with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), Pub. L. No. 111-203, 124 Stat. 1376. Indeed, amici were sponsors of Dodd-Frank, participated in drafting it, serve or served on committees with jurisdiction over the federal financial regulatory agencies and the banking industry, or served in the leadership when Dodd-Frank was passed. They are thus familiar with the critical role that the Consumer Financial Protection Bureau (CFPB) plays in the legislative plan that Congress put in place when it enacted Dodd-Frank to prevent future financial crises like the Great Recession of 2008, and they understand how critical the CFPB Director’s for-cause removal provision is to the CFPB’s ability to play its intended role effectively. Amici thus have a strong interest in the D.C. Circuit rehearing this case en banc and making clear that the CFPB’s structure is consistent with the Constitution’s text and history.
By concluding that the CFPB’s leadership structure is unconstitutional and severing the provision that made its Director removable only for cause, the panel decision fundamentally altered the CFPB and hampered its ability to function as Congress intended. It also called into question the constitutionality of other regulatory agencies with similar structural features. For those reasons alone, this case involves a question of “exceptional importance” that merits reconsideration by the en banc court. Moreover, the panel’s decision is at odds not only with the text and history of the Constitution, but also with long-standing Supreme Court precedent — yet another reason why this case presents a question of “exceptional importance.”
In a related development on this case, On November 23, 2016 the D.C. Circuit entered an Order 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 to the petition for rehearing en banc, expressing the views of the United States. But, the Order does not set a date by which the Solicitor General must file any response.
The filing by the group of politicians is interesting. Clearly they are concerned about potentially dramatic changes to the CFPB under the Trump administration.
The Court’s November 23rd Order is also interesting. It is possible that the Solicitor General may file its response quickly, before the January inauguration of Mr. Trump. The lack of a deadline also leaves open the possibility of a response from the Solicitor General after the change in administration.
insideARM will continue to monitor this very important case.