CFPB and amici file briefs in support of Bureau’s constitutionality

cfpb files brief phhOn March 31, the CFPB filed its opening brief in the en banc rehearing of the PHH case before the DC Circuit. Also filing amicus briefs in support of the CFPB were consumer advocacy groups, Democratic members of Congress, and legal scholars.

The CFPB’s primary argument focused on whether the CFPB’s structure as an independent agency led by a single-director-removable-only-for-cause is constitutional. According to the CFPB, determining the constitutionality of the CFPB’s structure depends solely upon whether the for-cause removal restrictions “are of such a nature that they impede the President’s ability to perform his constitutional duty.”

The Bureau relies upon Supreme Court precedent established in Humphrey’s Executor in 1935, claiming that the “Supreme Court has repeatedly recognized that Congress can, consistent with the Constitution, create independent agencies run by principal officers appointed by the President, whom the President may not remove at will but only for good cause.” According to the CFPB, whether an independent agency is led “by one, three, or five members will result in no meaningful difference in responsiveness and accountability to the President.”

In its brief filed on March 10, PHH argued that the reason Congress structured other independent agencies as commissions was to avoid the very problem the US structure of government was designed to prevent – the consolidation of executive, judicial and legislative power in the hands of a single person.

Not surprisingly, the CFPB also took a much different position on the proper remedy if the DC Circuit agrees with the three-judge panel’s October decision that declared the Bureau an unconstitutional agency. Unlike PHH’s proposal to “strike down the CFPB in its entirety,” the CFPB recommended a limited fix: “If this Court determines that the Bureau’s structure is unconstitutional, it should sever the for-cause removal provision.” Such a decision would preserve the CFPB’s single-director structure but allow the President to remove the Director at-will.

March 31 was also the deadline for “friends of the court” to file amicus briefs in support of the CFPB. Among the amici is a brief filed by current and former members of Congress, including Chris Dodd and Barney Frank, authors of the 2010 Dodd-Frank Act that established the CFPB. Senator Sherrod Brown and Representative Maxine Waters joined the brief as well. In their brief, the current and former members of Congress argue that the CFPB’s structure is constitutional and vital to the congressional design of Dodd-Frank Act. They also emphasize the importance of the agency’s independent status and the ability of a single director “to avoid the delay and gridlock to which multi-member agencies are susceptible.”

Tags: CFPB, DC Circuit, PHH

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