United Effort to Maintain a Strong, Independent Consumer Protection Agency

Today, Americans for Financial Reform (AFR), the Center for Responsible Lending (CRL), and other civil rights and consumer advocacy organizations, as well as 21 members of Congress submitted amicus briefs to the U.S. Court of Appeals for the District of Columbia Circuit in the case of PHH Corporation v. CFPB, in support of the CFPB.

The groups and members of Congress urged the full court to grant the CFPB's petition for a rehearing of a 2-1 panel decision last month, which they believe incorrectly ruled that the President may remove the CFPB Director without cause. They also underscored the need to maintain a strong and independent CFPB, as Congress intended, free from political and outside industry influence.

"By invalidating the CFPB director's for-cause removal protection, the panel decision topples Congress's design for this critical new agency and imperils its ability to function as intended. Worse still, the panel's one-hundred-page opinion reaches this result without even once addressing why Congress took such care to structure the CFPB as it did or how the CFPB's design is so critical to its proper functioning…This structure allows the Bureau to make decisions that protect consumers—even when those decisions are opposed by intense lobbying," wrote AFR and CRL. "Since the CFPB began operating in July 2011, it has proven to be highly effective in identifying violations of consumer protection law and remedying the problems with precision and agility. The CFPB's effectiveness, and its ability to respond to unlawful practices quickly, is attributable in part to its leadership by a single director and its insulation from political influence and industry capture."

Additionally, members of Congress, in a brief filed by the Constitutional Accountability Center (CAC), wrote, "By concluding that the CFPB's leadership structure is unconstitutional and severing the provision that made its Director removable only for cause, the panel decision fundamentally altered the CFPB and hampered its ability to function as Congress intended. It also called into question the constitutionality of other regulatory agencies with similar structural features. For those reasons alone, this case involves a question of 'exceptional importance' that merits reconsideration by the en banc court. Moreover, the panel's decision is at odds not only with the text and history of the Constitution, but also with long-standing Supreme Court precedent—yet another reason why this case presents a question of 'exceptional importance.'"

If the full D.C. Circuit agrees to hear the case, the ruling 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.

View a copy of civil rights and consumer advocacy organizations' amicus brief, which was signed by: Americans for Financial Reform, California Reinvestment Coalition, the Center For Responsible Lending, Consumer Federation of America, The Leadership Conference on Civil and Human Rights, the National Community Reinvestment Coalition, the National Consumer Law Center, the National Council Of La Raza, United States Public Interest Research Group Education Fund, Inc., and Woodstock Institute.

View a copy of the members of Congress' amicus brief, which was signed by: Sen. Sherrod Brown, Rep. Michael E. Capuano, Rep. John Conyers Jr., Rep. Elijah Cummings, Sen. Dick Durbin, Rep. Keith Ellison, Former Rep. Barney Frank, Rep. Alan Grayson, Rep. Al Green, Rep. Stephen F. Lynch, Rep. Carolyn B. Maloney, Sen. Bob Menendez, Sen. Jeff Merkley, Former Rep. Brad Miller, Rep. Gwen Moore, Rep. Nancy Pelosi, Sen. Jack Reed, Sen. Harry Reid, Rep. Brad Sherman, Sen. Elizabeth Warren and Rep. Maxine Waters.

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Ricardo Quinto at ricardo.quinto@responsiblelending.org.

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