Encouraging Signs from D.C. Circuit in PHH v. CFPB as Consumer Rights Hang in the Balance

En Banc Panel of D.C. Circuit Court Offers Encouraging Signs During Today’s Arguments, Ruling Could Have Enormous Impact on Consumer Protections


WASHINGTON, D.C. – Today, the U.S. Court of Appeals for the D.C. Circuit sat for an en banc session to rehear arguments in PHH v. CFPB. The case, which was slated for retrial after a politically motivated initial ruling by a three-judge panel in October 2016, could have a significant impact on the Consumer Bureau’s authority to crack down on banks, credit card companies, debt collectors, and other predatory financial institutions that prey on hard-working American families. Following encouraging signals and lines of questioning from several judges during arguments today, Allied Progress released the following statement:

After today’s arguments we are cautiously optimistic that the D.C. Circuit Court will stand up for American consumers and the Constitution by ultimately ruling in the CFPB’s favor. The plaintiffs in this case have been cheered on from the legal sidelines by the very same powerful Wall Street special interests that instigated and profited from the 2008 financial crisis while millions of Americans were losing their homes and their retirement savings. The Consumer Bureau was created to hold these powerful financial institutions accountable–to make sure we never experience such a crisis ever again,” said Karl Frisch, executive director of Allied Progress.

He continued, “The Consumer Bureau is under attack from special interests on all sides–from the Goldman Sachs-infested Trump administration and Wall Street-funded Congress, to baseless corporate legal fights like this case. It’s no wonder these corporate cronies want to kill this important agency that has greatly diminished their ability to rip off consumers. After all, the Consumer Bureau has taken $12 billion from predatory financial institutions and returned it directly to more than 27 million Americans who were screwed over.”

On the single-director structure being more accountable than a Commission:

  • Judge Millett: “Chief Justice Roberts said in Free Enterprise that the diffusion of power diffuses accountability, so having one person is more accountable than having three or five.” (Listen – 8:00)
  • Judge Griffith: “That seems to strengthen the President’s power–if you only need to get rid of one person, that seems to be strengthening the President’s power.” (Listen – 4:48)

On the importance of the CFPB’s independence:

  • Judge Pillard: “There is a pattern in the financial regulatory agencies of actually wanting to have some amount of separation, and, as I take it, it’s consistent with the Constitution and with the Executive’s authority to take care that the laws be faithfully executed–to have those people removable for inefficiency, for malfeasance in office, neglect of duty, but not have them removable because the President disagrees as a policy matter . . . [to] avoid financial cronyism in favor of faithful execution of the laws, and you’re saying that’s out of bounds?” (Listen – 22:25)

On Supreme Court precedent:

  • Judge Tatel: “But we’re an appeals court. We’re bound by Supreme Court precedent, including Morrison v. Olson…. I have not seen an argument in your brief, even if I agreed with you that there is a serious risk from the “for cause” removal provision for this director…, I don’t see how as a judge on an appeals court, bound by Morrison and Humphrey’s that I can go there… I don’t see where this court gets that flexibility… I have not heard an argument from you yet that we’re not bound by that.” (Listen – 13:23)

To speak with Karl Frisch about PHH v. CFPB, please contact Tucker Middleton at 202-644-8526 or tucker@alliedprogress.org.

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Allied Progress is a nationwide, progressive advocacy organization that uses hard-hitting research and creative campaigns to hold Wall Street and powerful special interests accountable. Since launching in 2015, the organization has led high-profile campaigns on several issues including reforming the payday lending industry and exposing the those working to cripple the Consumer Financial Protection Bureau.

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