The U.S. Department of Justice filed an amicus brief in federal court on Friday, March 17, challenging the constitutionality of the structure of the Consumer Finance Protection Bureau.
The CFPB is challenging an October decision by the U.S. Court of Appeals for the District of Columbia Circuit. In that decision, the court found the CFPB’s leadership structure, specifically the lack of oversight over the director and the fact that he or she cannot terminated for cause, was unconstitutional. The appeals court also overturned a $109 million fine the CFPB levied against PHH Mortgage Corp. after a lower court found the mortgage giant guilty of being involved in a kickback scheme.
“Because a single agency head is unchecked by the constraints of group decision-making among members appointed by different presidents, there is a greater risk that an ‘independent‘ agency headed by a single person will engage in extreme departures from the president’s executive policy,” the DOJ’s brief said.
The next hearing is scheduled for May 24.