On March 17th, the U.S. Department of Justice filed an amicus brief with the U.S. Circuit Court in Washington, D.C. regarding the continued dispute over the constitutionality of the Consumer Financial Protection Bureau’s single independent director structure in PHH v. CFPB. The D.C. Circuit is scheduled to rehear the case en banc in May, after it previously ruled on October 11, 2016 that the CFPB, an independent agency created by the Dodd-Frank Act of 2010 and organized under the Federal Reserve, was structured unconstitutionally by allowing its single director to only be fired “for cause”. Unlike other independent federal agencies headed by a board, the CFPB’s single director lacked the proper accountability that ensures all branches of the federal government are kept in balance.
In an unusual move, the Trump Administration appears to be abandoning the position of a federal agency while the agency’s own constitutionality is in question. Senior White House officials are pressing for sweeping changes to the CFPB, its purpose, and its authority. At the same time, Congress is attacking the agency from all angles, recently submitting proposals to subject the CFPB to an Inspector General, shift control of the CFPB’s budget to Congress, require new rules to be reviewed by the President’s Office of Management and Budget, and limit its enforcement capacity. At the very least, the new administration and Congress are signaling that it is time to change how the CFPB conducts business.
