Corporate Accountability

CFPB’s defenders mount legal challenge on agency’s behalf

By Lorraine Woellert

Consumer advocates and congressional Democrats are seeking to mount their own legal defense of the CFPB amid fears that President Donald Trump will weaken the agency or betray it in court.

The Constitutional Accountability Center asked the U.S. Court of Appeals in Washington for permission to intervene in a case on behalf of Senate Banking Committee ranking member Sherrod Brown and House Financial Services Committee ranking member Maxine Waters.

“It has become increasingly clear that movants’ interests may no longer be adequately represented by the new Administration,” the center wrote in its filing, referring to the two Democratic lawmakers. “Thus, movants seek to intervene to defend the constitutionality of the important law they helped enact.”

In a separate filing, Americans for Financial Reform, the Center for Responsible Lending, Self-Help Credit Union, The Leadership Conference on Civil and Human Rights, U.S. Public Interest Research Group and Maeve Elise Brown, chair of the CFPB Consumer Advisory Board, also sought to be heard in the case.

A three-judge panel of the appellate court in October found the bureau constitutionally flawed and gave the White House authority to remove its director at will, giving a lift to Republican efforts to rein in the powerful independent agency.

“The CFPB is unconstitutionally structured,” the court found. “Never before has an independent agency exercising substantial executive authority been headed by just one person.”

That opinion is on hold while the CFPB appeals. The bureau’s allies, fearful that Trump will try to fire CFPB Director Richard Cordray for cause, have launched a political campaign, in addition to the legal effort, to protect the bureau’s independence.

“Any attempt to weaken the CFPB by disrupting its leadership or structure presents a real threat to consumers across the country,” said Michael Calhoun, president of the Center for Responsible Lending. “It will revert us back to lax financial regulations and cause another painful economic crisis that we simply cannot afford.”

The case is PHH Corp. v. CFPB.