Democratic state attorneys general, two members of Congress and consumer groups are renewing their request to help defend the CFPB in court, contending that the Trump Administration is likely to abandon the agency.
The groups argue that while the Obama Administration was prepared to mount a vigorous defense of the agency in a suit challenging the constitutionality of the CFPB’s structure, the Trump Administration opposes the existence of the agency.
The US Circuit Court of Appeals for the District of Columbia already has denied the request, but the groups are asking the court to reconsider.
“The motion argued that intervention was warranted because there is a substantial probability that, due to changing political circumstances, the CFPB and/or the DOJ will drop their defense of the CFPB’s constitutional structure and acquiesce in the panel’s holding,” the consumer groups and the credit union argue.
In the suit, filed by PHH, a mortgage company, a panel of the U.S. Circuit Court of Appeals for the District of Columbia ruled that the structure of the CFPB is unconstitutional because it is governed by a single director – currently Richard Cordray – who can only be removed for cause. The panel said that the president should be able to fire the director for any reason, but stayed that order.
“An independent CFPB was expressly created to combat the regulatory failures that led to the worst financial crisis in eighty years,” the state attorneys general argue.
The congressional request was filed by Rep. Maxine Waters (D-Calif.), the ranking Democrat on the House Financial Services Committee and Sen. Sherrod Brown (D-Ohio), the ranking Democrat on the Senate Banking Committees.
In addition to the credit union and the Center for Responsible Lending, the groups that filed the motion are Americans for Financial Reform, the Leadership Conference on Civil and Human Rights and the United States Public Interest Research Group.
One individual, Maeve Brown, the chairman of the CFPB’s Consumer Advisory Board, joined the groups in the motion.
The motion to intervene was filed by attorneys general of Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Mississippi, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington and the District of Columbia.
