Courts rule against CFPB, declare structure unconstitutional

The U.S. Court of Appeals for the District of Columbia this morning overturned a $109 million fine against PHH Mortgage and called Consumer Financial Protection Bureau (CFPB) “unconstitutionally structured.” According to League sources, this is certain to resurrect efforts on Capitol Hill to restructure CFPB and limit its authority.
The Court also said that “the (CFPB) director enjoys more unilateral authority than any other officer in any of the three branches of the U.S. government, other than the President …This is a case about executive power and individual liberty. Because of their massive power and the absence of presidential supervision and direction, independent agencies pose a significant threat to individual liberty and to the constitutional system of separation of powers and checks and balances.”
CFPB had fined PHH Mortgage for referring customers to insurers who purchased reinsurance from a PHH subsidiary, a practice CFPB said amounted to illegal kickbacks. PHH sued, saying CFPB overstepped its authority.
The LSCU will keep you informed as more details emerge on this high-impact issue.