U.S. PIRG Joins Legal Brief Defending CFPB Constitutionality

Case to be heard May 24th in DC Circuit, US Court of Appeals
Last updated: 3/31/2017

Attached is a brief from several consumer and civil rights organizations, including U.S. PIRG Education Fund, Americans for Financial Reform, Center for Responsible Lending, the National Council of La Raza and others supporting the CFPB's constitutionality in the case PHH vs. CFPB. The amicus, or friend of the court, brief is co-written by PIRG Litigation Director Mike Landis, and was filed today in the DC Circuit, U.S. Court of Appeals.

The full circuit will hear the case en banc on May 24th, after it vacated its own 2-1 panel decision holding that the CFPB's structure was unconstitutional because the president purportedly lacks sufficient authority to remove its director. We disagree and urge the full court to hold that the CFPB's leadership structure is constitutional.

Note that we also filed a joint amicus at the panel level. We also, along with several other consumer groups, several members of Congress and several state Attorneys General, had unsuccessfully requested party-intervenor status in the case at both the panel and en banc levels. Defending the CFPB matters to American consumers and taxpayers.


"With respect to the first question, the Supreme Court’s precedents recognize that when Congress determines that a regulatory agency must be independent in order to achieve its statutory purposes, it has the power to make the agency’s directors removable only for cause. Congress made precisely that determination with respect to the CFPB. By vesting authority in a single Director—and ensuring that the Director has the independence necessary to protect consumers in a rapidly evolving marketplace—Congress ensured that the CFPB would be nimble enough to respond to dangers before they result in widespread consumer harm. Through the CFPB’s independent structure, Congress also guarded the Director and the Bureau from capture by the powerful interests that threaten the wellbeing and financial security of the American people. 

At the same time, Congress recognized the need for accountability, which is why it made the Director removable for specified causes and provided for numerous additional safeguards—many of them unique to the CFPB among bank regulators— that prevent the Bureau from overreaching. These include a cap on the CFPB’s independent funding, multi-agency and small business reviews of its rulemakings, and regular audits and reports to Congress, in addition to the normal structural checks on agency action, including judicial review.

This combination of agility and accountability has worked."

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