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WBK Industry News - Federal Regulatory Developments

The Justice Department Files Conflicting Amicus Brief in PHH Case

The Department of Justice (“DOJ”) filed an amicus brief in the PHH v. CFPB case, on Friday, March 17, 2017, arguing that the current structure of the CFPB is unconstitutional. This argument contradicts the DOJ’s previous amicus brief filed last November in support of the CFPB’s request for rehearing of the U.S. Court of Appeals for the D.C. Circuit’s ruling last fall that the CFPB’s current structure is unconstitutional.

In its recent amicus brief, the DOJ requested the DC Circuit to consider the constitutionality of the current CFPB structure, which consists of a single Director who is appointed by the president, with the advice and consent of the Senate, for a term of five years, and may only be removed by the president for “inefficiency, neglect of duty, or malfeasance in office.”  The DOJ agreed with the original DC Circuit panel’s decision that the single director structure of the CFPB is unconstitutional. The DOJ also agreed with the original panel’s decision that the “for cause” removal provision at issue is severable from the remainder of the CFPB statutory scheme, which had the effect in the original decision of keeping the CFPB in place, band made the director removable “at-will” by the president.

The DOJ failed to address any issues regarding RESPA, and explicitly took no position on the statutory provisions at issue in the case.

The entire Amicus Brief can be found here: https://assets.documentcloud.org/documents/3519662/3-17-17-US-Amicus-Brief-PHH.pdf.