Consumer Bureau's Constitutionality Goes Before Full Appeals Court

The U.S. Court of Appeals for the D.C. Circuit on Thursday agreed to reconsider a decision of one of its three-judge panels, likely extending the tenure of embattled Consumer Financial Protection Bureau Director Richard Cordray.

The full court will review the three-judge panel’s October ruling  that CFPB’s structure is unconstitutional. The ruling came in response to a case filed by New Jersey mortgage company PHH Corp. challenging a 2015 action by the consumer bureau that cost the company $109 million.

“Rehearings en banc are generally disfavored and granted only for matters of ‘exceptional importance,’ ” the Association of Credit and Collection Professionals said in a statement. “However, the PHH case could determine whether CFPB Director Richard Cordray can keep his job until his term expires in July 2018, or if President Donald Trump can fire him at will."

Republicans in Congress have long sought to scale back the bureau’s powers by restructuring its leadership and funding mechanisms to make it more accountable to Congress. President Trump on Feb. 3 signed an executive order calling for a review of the 2010 Dodd-Frank Financial Reform law that created the bureau, and White House press secretary Sean Spicer has called it an “unaccountable and unconstitutional new agency.”

Robert Weissman, president of the nonprofit liberal-leaning Public Citizen, said, “It’s plain enough what’s at stake: Will the agency that in a few short years has saved consumers $12 billion – and deterred a slew of rip-offs, scams and schemes that banks and financial predators avoided for fear of the CFPB – be able to continue to do its job? Or will the big banks get their way and have the agency neutered?”