Congress and Advocacy Organizations Weigh in on PHH Case, SG to Follow
As we noted in a recent post, the CFPB has sought reconsideration of the D.C. Circuit Court of Appeals’ decision in PHH Corp., et al. v. Consumer Financial Protection Bureau. In that decision, the D.C. Circuit ruled unconstitutional the provision of the Dodd-Frank Act establishing that the CFPB Director could be fired only “for cause,” i.e., for inefficiency, neglect of duty, or malfeasance in office. On November 18, 2016, the CFPB sought reconsideration of the ruling en banc.
Two more groups have now waded into this battle. On November 29, 2016, 21 current and former members of Congress who were involved in the passage of Dodd-Frank, including former Rep. Barney Frank (D-Mass.), Rep. Nancy Pelosi (D-CA), Sen. Harry Reid (D-Nev.), and Sen. Elizabeth Warren (D-Mass.), filed an amicus brief in support of the CFPB’s petition. This brief was followed a day later by anotheramicus brief in support of the CFPB’s petition filed by 10 consumer advocacy organizations, including The National Consumer Law Center and the National Council of La Raza. Both briefs argue that the “for cause” removal provision is necessary to ensure the CFPB’s political independence and that the D.C. Circuit deviated from established precedent permitting Congress to insulate agency heads from presidential removal.
PHH took no position in response to these amici briefs, but did point out that the D.C. Circuit’s rules typically only permit amicus briefs upon invitation of the court. On November 23, 2016, the D.C. Circuit invited the Solicitor General to respond, but did not invite briefing from other amici. The court granted a request from the Solicitor General to file a response on behalf of the United States by December 22, 2016, and also extended PHH’s time to respond to the CFPB’s petition until December 22. The December 22 deadlines indicate that the CFPB’s petition for rehearing en banc is unlikely to be resolved until next year.