US reported to switch sides, support PHH against CFPB

by Ryan Smith07 Mar 2017

The United States has revealed that it’s switched sides in PHH’s landmark case against the Consumer Financial Protection Bureau, now supporting the mortgage company.

Last year, a three-judge panel for the U.S. Court of Appeals ruled that the CFPB’s structure was unconstitutional because its director, Richard Cordray, could only be fired for cause. That made the agency practically unaccountable to the rest of the government, the court ruled.

The CFPB, however, appealed that ruling, and in February was granted a rehearing before the entire court. Amicus briefs supporting PHH in the case must be filed by March 10, while briefs supporting the CFPB must be filed by March 31, according to a report on the CFPB Monitor blog. Amicus briefs are filed by parties with a strong interest in the case who are not themselves litigants.

The US Solicitor General, who is allowed to comment on the case in order to express the views of the government, has not yet filed a brief. However, the Solicitor General’s office did file an unopposed motion to extend its filing deadline to March 17, according to a HousingWire report. That motion signals that the government will come down on the side of PHH; if it was siding with the CFPB, it wouldn’t need the extension.

When the Solicitor General first filed a response to the case in December, it supported the CFPB. But now Donald Trump is in office, and he’s been open about his plans to roll back the regulatory framework. And the Wall Street Journal has reported that Trump disagreed with the court’s February decision to rehear the case.

“Since the Department of Justice is now headed by Republican Attorney General Jeff Sessions, the amicus brief to be filed by the United States can be expected to support PHH’s position that the CFPB’s single-director-removable-only-for-cause structure is unconstitutional,” CFPB Monitor said.


Related stories:
Bank wants to join PHH in court battle against CFPB
Democratic lawmakers join battle between CFPB and PHH

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