How will the PHH decision affect CFPB rulemaking?

Last week, in PHH v. CFPB, the DC Circuit held that the CFPB’s single-director-removable-only-for-cause structure is unconstitutional. In its opinion, the three-judge panel noted that it was unnecessary for the court to “consider the legal ramifications” of its decision “for past CFPB rules or for past agency enforcement actions.” Despite the court’s decision not to address the issue, it raises an obvious question: “Will the PHH decision affect CFPB rulemaking?” It is apparent that the decision could result in greater regulatory oversight for CFPB rulemaking.

A closer look at DC Circuit’s CFPB Decision

Earlier this week, a three-judge panel held that the CFPB is unconstitutionally structured and that the agency violated due process principles when it retroactively applied its RESPA interpretations while pursuing an enforcement action against mortgage lender, PHH. The court vacated the Bureau’s ruling and remanded the case to the CFPB for reconsideration consistent with the DC Court’s opinion.