D.C. Circuit Won’t Upend CFPB’s Single-Director Power Structure - ABI

A federal appeals court yesterday upheld the lawfulness of the single-director power structure of the Consumer Financial Protection Bureau, the Obama-era agency undergoing a dramatic shift in focus as Trump-appointed officials take over leadership slots, the National Law Journal reported. The U.S. Court of Appeals for the D.C. Circuit, sitting as a full court, said that the president can only remove the director of the agency for cause, not at will. The mortgage company PHH Corp. had argued the leadership scheme lacked accountability. “Applying binding Supreme Court precedent, we see no constitutional defect in the statute preventing the president from firing the CFPB director without cause. We thus uphold Congress’s choice,” Judge Nina Pillard wrote for the court. “Congress’s decision to provide the CFPB Director a degree of insulation reflects its permissible judgment that civil regulation of consumer financial protection should be kept one step removed from political winds and presidential will. We have no warrant here to invalidate such a time-tested course.” PHH still has a chance to challenge anew the $109 million penalty the agency imposed for alleged misconduct.

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