Trump Administration Files Brief in PHH Corp. v

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The agency aims to regulate the consumer-finance industry, including credit card companies, loan agencies, and other financial products and services.

Now, the CFPB would need to seek another group to join the case on its behalf if it were to escalate to the high court, said Michael Landis, litigation director for the consumer advocacy group U.S. Public Interest Research Group, talking to The Washington Post.

The Wall Street Journal reports that Justice Department lawyers have argued that the current structure of the CFPB are problematic, as it allows the presidency to remove the director only for negligence or malfeasance.

Friday's amicus brief marks a reversal of the DOJ's previous stance but does not fully support the position taken by PHH Corp., the mortgage lender suing the CFPB over enforcements actions taken against the company. In October 2016, a panel of the D.C. Circuit concluded that the CFPB misinterpreted RESPA and that its single-Director structure violated the constitutional separation of powers.

The rehearing will intensify further when oral arguments before the en banc court will be heard on May 24. That's also the deadline for friend-of-the-court briefing by CFPB supporters.

The CFPB's ability to enforce and create legislation under a single director has been questioned by a number of bankers and Republican lawmakers. The brief states that, instead, the president can remove the director at will. (I find it hard to see how anyone could find otherwise.) Part of the problem with the agency's structure, as the court found, is that it has a single head who is removable only for cause. "The Supreme Court's analysis in Humphrey's Executor was premised on the nature of the FTC as a continuing deliberative body, composed of several members with staggered terms to maintain institutional expertise and promote a measure of stability that would not be immediately undermined by political vicissitudes".

"A single-headed independent agency presents a greater risk than a multi-member independent commission of taking actions or adopting policies inconsistent with the President's executive policy", the Justice Department argued, saying a commission must compromise, while a single director does not answer to anyone.

The Justice Department closed its summary with a request for the U.S. Court of Appeals for the District of Columbia Circuit.

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