On Thursday, the U.S. Court of Appeals for the D.C. Circuit issued a per curiam order (a decision handed down by the court as a whole, without identifying any particular judge as the author) without a written opinion in PHH Corp., et al. v. Consumer Financial Protection Bureau, No. 15-01177 (D.C. Cir. Feb. 2, 2017). The order denied an attempt by 17 Democrat attorneys general to intervene in the appeals court case that found the Consumer Financial Protection Bureau’s structure was unconstitutional. The coalition was led by Connecticut’s Attorney General George Jepsen.
The PHH case is being closely watched because of its potential importance to the future of the CFPB.
As ACA reported previously, the appeals court panel ruled last October in a 2-1 split decision that a provision of the Dodd-Frank Act allowing the CFPB’s director to be removed only for cause was unconstitutional. The panel sought to strike that provision, allowing the president to remove the director at any time. The CFPB went back to the Court in November and asked the entire appeals court to revisit the decision. The CFPB’s petition for en banc review (for the entire court to consider) remains currently pending before the appellate court.
In the unusual legal move in late January the state attorneys general, two Democratic lawmakers and several consumer advocacy groups all filed motions arguing that they have legal standing to intervene (or to become involved in the lawsuit as third parties). The attorneys general argued that they have a vital interest in defending an independent and effective CFPB. They also asserted that the D.C. Circuit Court’s ruling, if permitted to stand, would undermine the power of state attorneys general to effectively protect consumers against abuse in the consumer finance industry, and significantly lessen the ability of the CFPB to withstand political pressure and act effectively and independently of the President.
In its opposition, PHH Corp. argued that “[t]he motion [to intervene] is egregiously untimely, there is no good cause for the delay in seeking to intervene, and there is no standing to intervene.” Counsel for PHH Corp. called the state AGs’ argument that they had a “legally cognizable interest in the ‘independence’ of the CFPB” as a “bridge too far.” And PHH Corp. argued that granting intervention for the state AGs would give them the ability to circumvent one of the only means Congress provided for the president to supervise litigation involving the CFPB.
ACA will continue to follow the PHH Corp. case and will keep its members posted on any new developments, which will be most likely a decision for the D.C. Circuit Court of Appeals with respect to the CFPB’s Petition for Rehearing En Banc. If you want to read more about the most recent significant judicial and CFPB decisions involving the credit and collection industry, ACA members can always find concise case summaries on ACA International’s Industry Advancement Program website
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