On March 31, 2017, Center on Finance, Law, and Policy faculty director Michael S. Barr of University of Michigan Law School, well-known Supreme Court and appellate litigator Deepak Gupta, and Georgetown Law professor Adam Levitin, as counsel of record filed a brief in the D.C. Court of Appeals arguing that the Consumer Financial Protection Bureau is constitutional. The amici curiae brief was filed on behalf of 14 law professors from around the country with expertise in financial regulation and consumer finance, in the ongoing PHH Corporation v. Consumer Financial Protection Bureau case. You can read the full brief here. PHH brought suit to challenge the CFPB’s constitutionality in 2015 after the agency pursued an enforcement action against PHH that resulted in a $109 million order against the mortgage lender.
In the brief requesting a rehearing before all of the U.S. D.C. Circuit’s active judges, the financial regulation scholars took issue with the Court’s three-judge panel holding that the CFPB is unconstitutional because it is an independent agency with a single director at its head who can only be removed for cause. In an exhaustive review of U.S. agencies, the scholars noted that U.S. agencies have a wide variety of leadership structures and features, including the number of leaders (the Social Security Administration and Federal Housing Finance Agency both have single directors, too); selection process for agency heads; board membership and term lengths; removal protections; and other variables.
On behalf of the financial regulation scholars, Barr, Gupta, and Levitin wrote: “Viewed holistically, the CFPB is a highly accountable agency. It was designed specifically in response to a lack of accountability by other financial agencies…”
The Court agreed, and heard oral argument in the case on May 24, 2017. There is no deadline to respond, but a decision is expected at the end of the summer or in early fall 2017.
Christie Baer is the assistant executive director of the Center on Finance, Law, and Policy.