Today, the Consumer Financial Protection Bureau (CFPB) filed a petition for rehearing before the U.S. Court of Appeals for the District of Columbia Circuit urging the court to revisit a three judge panel's 2-1 decision made last month on CFPB's enforcement order in PHH Corporation vs. CFPB. In its decision, the panel ruled that the President must be able to remove the CFPB Director without cause.
Civil rights groups underscored the need for the CFPB to preserve its independence as a strong regulatory agency, as Congress intended, and support the Bureau's efforts to have the decision reviewed by the full D.C. Circuit. The groups also emphasized the important work the CFPB has done to protect consumers under Director Richard Cordray's leadership, which is set to expire in July 2018.
Several civil rights groups released the following statements:
"We need a strong and independent CFPB agency and director now more than ever. If the 2008 financial crisis showed us anything, it's that people need an independent regulator to look after the interests of consumers. We've already seen conservative members of Congress attempt to weaken CFPB's authority for meritless and political reasons. Director Cordray has led the Bureau with a steady hand and worked tirelessly with his staff to return billions of dollars back to hardworking people across the country harmed by abusive financial practices. The Center for Responsible Lending will continue to support the CFPB as the agency fights to maintain its independent structure so it can carry out its mission," said Mike Calhoun, President of the Center for Responsible Lending (CRL)
"We can't afford to have the crucial work of the CFPB interrupted. Its current structure and leadership has helped save countless people across the country from abusive financial practices. The impact of unscrupulous and predatory financial services providers on the communities we serve and represent, which contributed immensely to the economic downturn of 2008, is well documented and continues to decimate our families and our neighborhoods. The NAACP remains committed to protecting the integrity of the Bureau and will continue to work to preserve its strength and its ability to carry out its vital mission," said Hilary O. Shelton, the Director of the NAACP's Washington Bureau and the Senior Vice President for Policy and Advocacy.
"In the five years since it opened its doors, the Consumer Financial Protection Bureau has worked tirelessly to enforce the laws that went ignored in the run-up to the 2008 financial crisis, and has done more than any other federal agency to empower consumers against predatory, deceptive, and outright fraudulent behavior by bad actors in the financial industry. It is disappointing but not surprising that payday lenders, debt collectors, for-profit colleges, and other powerful industry groups have turned to their allies in Congress and the courts in an effort to weaken the Bureau so they can keep exploiting people of color and other financially vulnerable Americans. Last month's ruling against the Bureau was wrong on the law and wrong for consumers, and we hope that the full D.C. Circuit will get it right," said Wade Henderson, president and CEO, The Leadership Conference on Civil and Human Rights
"Since the CFPB opened its doors five years ago, it has restored order to the financial marketplace, and consumers, in particular communities of color, overwhelmingly support its efforts to reign in abusive financial practices. Under the direction of Director Richard Cordray, the CFPB has delivered millions of dollars of relief to consumers and brought much-needed transparency to industries that sorely lacked it, including remittance transfers, credit cards, student loan servicing, and payday loans. The National Council of La Raza (NCLR) supports an independent Bureau that has all of the tools at its disposal to make financial markets more fair, transparent, and consumer-friendly," said Eric Rodriguez, Vice President of the Office of Research, Advocacy and Legislation at NCLR.
Additional Background: If the full D.C. Circuit agrees to hear the case, the judgment of the three-judge panel is immediately vacated and has no legal effect. As a result, the CFPB would continue to be structured as Congress intended and the CFPB Director would not be removable at will by the President.