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


  • by not happy! | 3/7/2017 4:37:25 PM

    Time to fire Trump and his cronies for repeatedly lying to the press and the public!
    Why would a President of the Unites States get involved in Micro-managing a country.
    CFPB's role has been to protect the Citizens from institutions that would take advantage of anyone if they could...why is that a bad thing?

  • by Thankful | 3/7/2017 7:02:34 PM

    THE CFPB and TRID are a nuisance, it does nothing more than to confuse people. Trump is the best thing that has happened to this country.

  • by Amazed | 3/8/2017 2:43:57 AM

    “It’s important to keep in mind that we are a law enforcement agency,” Cordray said in an interview with The Wall Street Journal at a financial regulation event. . .

    We have watched the CFPB in its enforcement capacity:

    1) Unilaterally Set (Vague/Complex) Rules,
    2) Unilaterally Police and Enforce the Rules,
    3) Unilaterally decide to act as Prosecuting Attorney,
    4) Unilaterally appoint itself as Expert Witness,
    5) Unilaterally determine that statutes were violated,
    6) Unilaterally determine that fines are appropriate.

    The CFPB then has the choice to enforce laws administratively thru an Administrative Law Judge (ALJ) or in court. What is amazing is that If CFPB doesn't like the decision of the ALJ, it can Unilaterally appeal the decision back to the CFPB Director (itself), and Unilaterally rule to increase the penalty (PHH).

    5) Unilaterally Acts as Judge,
    6) Unilaterally Acts as Jury,
    7) Unilaterally Acts as Executioner - Levies Fines. (Civil Monetary Penalty)

    Nowhere along the way was there a policing entity needing to convince a prosecuting attorney that there is a valid case.
    Nowhere along the way was there a prosecuting attorney that needed to convince a judge to hear the case.
    Nowhere along the way was there an impartial jury to decide whether the case had any merit.

    If you aren't exhausted, and have deep pockets, then you can to continue to fight, by appealing this decision to the U.S. Court of Appeals.

    If this structure is so great, then how do we feel about extending it to all of the other Governmental Agencies?

    While we are at it, if this structure is so great, how do we feel about extending this type of power to the Oval Office?

    Who in their right mind would unleash an unaccountable organization like this in America without the normal checks and balances?


Should CFPB have more supervision over credit agencies?