Case Granted En Banc Is Essential Step In Maintaining Key Consumer Protections

Today, the U.S. Court of Appeals for the D.C. Circuit granted the Consumer Financial Protection Bureau’s (CFPB) petition to hear PHH Corporation vs. CFPB en banc. This order means that the CFPB can continue to operate as Congress intended during the pendency of the en banc proceeding, and is an important first step toward a decision by the full Court invalidating the panel’s previous and unprecedented 2-1 ruling. (PDF)

The CFPB recently challenged the panel’s decision, which undermined the CFPB’s independence to regulate the financial services industry and protect consumers from Wall Street greed in holding that the President may remove the CFPB Director without cause.

In November, consumer and civil rights organizations filed a friend of the court brief (PDF) in the case. In January, consumer and civil rights advocates filed a motion to intervene. (PDF) In the filings, they pressed their concerns that the Trump Administration may not uphold the Dodd-Frank Act reforms that created the consumer protection agency and led to the recovery of billions of consumer dollars.

Leading consumer advocates and civil rights groups praised the Court’s decision and are hopeful that the full court will uphold the CFPB’s independence and rule in favor of American consumers. Over the last five years, the CFPB has used its independent authority to provide nearly $12 billion in relief to 29 million consumers.

The groups issued the following statement:

"The court’s decision to hear the petition is a step in the right direction. We need a strong and independent CFPB agency and director now more than ever," said Mike Calhoun, president of the Center for Responsible Lending. "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 and their political allies attempt to weaken CFPB's authority for meritless reasons, but 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."

"We welcome the news that the full Court of Appeals is rehearing this case. The CFPB's independence from Wall Street and predatory lender special interests, and its effective leadership structure, are vital to the Bureau's ability to police the industry and protect consumers," said Lisa Donner, executive director of Americans for Financial Reform.

"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 services industry," said Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights. "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 financially vulnerable Americans. The panel ruling against the Bureau was wrong on the law and wrong for consumers, and we are relieved that the full D.C. Circuit will take this opportunity to get it right."

"We are glad the D.C. Circuit recognized the importance of this case and that the CFPB will be able to continue to be structured as Congress intended while the full court considers the case. We’re confident that the full court will recognize that the structure of the CFPB is clearly constitutional and allow the CFPB to maintain its independence from undue political pressure as it protects America’s consumers, just as Congress envisioned," said Brianne Gorod, Chief Counsel of the Constitutional Accountability Center.

"The court’s decision to grant the petition and rehear the case is the right call. We can't afford to have the crucial work of the CFPB interrupted," said Hilary O. Shelton, director of the NAACP's Washington Bureau and senior vice president for policy and advocacy. "Its current structure and leadership has helped millions of families across the country fight against 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 steadfast in our commitment to protect integrity of the CFPB and will continue to work to preserve its strength and independence to carry out its important mission."

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