For Immediate Release
March 31, 2017
Contact: Dominic Hawkins, dhawkins@skdknick.com
Civil Rights Groups, Consumer Advocates, Legal Scholars and Members of Congress
File Amicus Briefs in PHH Corporation vs. CFPB
Diverse Show of Support for a Strong, Independent Consumer Protection Agency
WASHINGTON – Today, consumer and civil rights groups, leading legal scholars and members of Congress will submit amicus briefs to the U.S. Court of Appeals for the D.C. Circuit in the case of PHH Corporation v. CFPB in support of the Consumer Financial Protection Bureau. The diverse amici urge the full D.C. Circuit Court of Appeals to maintain a strong, independent agency to protect American consumers.
The filings from consumer watchdogs, civil rights organizations, academics and legislators underscore the legality of CFPB’s structure and the need to maintain a strong and independent agency, which has already secured $12 billion in relief for 29 million Americans harmed by unscrupulous financial companies.
The amici issued the following statements:
“The Consumer Financial Protection Bureau works, and that’s why Wall Street banks and predatory lenders have drawn a target on it,” said Lisa Donner, Executive Director of Americans for Financial Reform. “Weakening the CFPB means weakening an agency that recovered $12 billion for 29 million Americans. We will fight back at every step.”
“Since its creation, the CFPB has played a critical role in protecting the nation’s consumers, and the agency’s vigor as a consumer advocate depends in no small part on its independence,” said Scott Nelson, attorney at Public Citizen. “Longstanding principles of separation of powers leave no doubt that Congress has the power to create watchdog agencies directed by leaders whose autonomy is ensured by statutory prohibitions on firing them without good cause.”
“The members of Congress who signed the brief we filed today, including the principal drafters of Dodd-Frank, provide a critical perspective in this case because they can explain why Congress structured the CFPB as an independent agency led by a single director,” said Brianne Gorod, Chief Counsel of Constitutional Accountability Center. “These members of Congress know better than anyone that Congress concluded that it was critical that the Bureau be free from undue industry influence and have the ability to act promptly and decisively in response to new threats to consumers. Congress had every right to make that choice.”
“The reason the Consumer Financial Protection Bureau is under attack is that it has been effective in protecting people from harmful and abusive financial practices,” said Michael S. Barr, Professor of Law and Public Policy, University of Michigan.
“It is not in the public interest for courts to invent groundless constitutional barriers to congressional policymaking about agency structure and process. The constitutional portion of the panel opinion would add further unjustified complexity to separation of powers law,” said Peter M. Shane, Jacob E. Davis and Jacob E. Davis II Chair in Law, The Ohio State University.
“Since its establishment, the CFPB has proven to be highly effective in responding to unlawful, abusive practices within the financial services industry. Its ability to make consumer protection a top priority is due to its leadership structure by a single director who is insulated from undue special interests. Any attempt to weaken the CFPB by disrupting its leadership presents a real threat to consumers across the country. It will revert us back to lax financial regulations and cause another painful economic crisis that we simply cannot afford,” said Mike Calhoun, President of Center for Responsible Lending (CRL).
“In the five years since it opened its doors, the CFPB has worked tirelessly to enforce the laws that went ignored in the run-up to the 2008 financial crisis, and has done more than any other federal agency to empower consumers against predatory, deceptive, and outright fraudulent behavior by bad actors in the financial industry. It is disappointing but not surprising that payday lenders, debt collectors, for-profit colleges, and other industry groups have turned to their allies in Congress and the courts in an effort to weaken the Bureau so they can keep exploiting financially vulnerable Americans. Last year’s appellate panel ruling against the Bureau was wrong on the law and wrong for consumers, and we are hopeful that the full D.C. Circuit will seize upon this opportunity to get it right,” said Wade Henderson, president and CEO, The Leadership Conference on Civil and Human Rights.
“Consumers rely on a CFPB run by a strong, independent and accountable director, like Richard Cordray,” says Linda Sherry, Consumer Action’s Director of National Priorities. “As the only federal financial regulator with sole responsibility for consumer protection, consumers cannot afford to lose it to a watered-down, weak regulator overly influenced by industry-controlled advisers. Consumer Action supports a firm and fair CFPB as it is currently structured.”
“The CFPB leveled the playing field between consumers and financial companies in a way that no other regulator had previously. It stopped scammers, created real consequences for illegal behavior by corporations, and increased transparency into the marketplace so that people are better equipped to make important financial decisions. Consumers want, need, and deserve a strong agency that stands up for their interests,” said Paulina Gonzalez, executive director of the California Reinvestment Coalition.
“These politicized and misleading attacks against the CFPB, orchestrated by the Trump Administration and their allies in Congress, come at the expense of hardworking Americans who have been deceived by companies and would rather not play by the rules,” said Tamara Draut, Vice President of Policy and Research at Demos. “The CFPB was created following the 2008 financial crisis as an independent body tasked with protecting consumers from the same greedy lenders that caused the housing crash and cost many consumers their homes, jobs and life savings. In the CFPB’s short history, it has returned hundreds of millions of dollars to millions of Americans; Demos is proud to support and defend the CFPB from these meritless attacks. The CFPB’s non-partisan and independent structure is critical to achieving the agency’s core mission – to protect consumers from unfair or deceptive practices and ensure companies are held accountable if they break the law. Trump has no mandate to replace Richard Cordray, who has done an impeccable job as the Director of the CFPB and has given the President no cause for his dismissal.”
“Since its creation, the CFPB has consistently worked to help make the financial marketplace more equitable for communities of color. Attempts to disrupt the bureau’s independent leadership or structure are a threat to all consumers, including Latino homeowners, who were disproportionately affected by the financial and housing crisis. Our country cannot afford to lose consumer protections that have restored order to the mortgage market and helped to remedy the harmful lending practices that stripped an entire generation of wealth from Latino families. Today, our nation is in a stable economic position, thanks to a federal watchdog that stands for workers and families by laying a foundation for a banking system that is fair, transparent, and accessible to all Americans,” said National Council of La Raza Associate Director of Economic Policy, Lindsay Daniels.
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Excerpts and links to the full briefs filed today can be found below:
Consumer and Civil Rights Organizations
“By vesting authority in a single Director—and ensuring that the Director has the independence necessary to protect consumers in a rapidly evolving marketplace—Congress ensured that the CFPB would be nimble enough to respond to dangers before they result in widespread consumer harm. Through the CFPB’s independent structure, Congress also guarded the Director and the Bureau from capture by the powerful interests that threaten the wellbeing and financial security of the American people.”
Click here to view the amicus brief submitted by Goldstein & Russell on behalf of consumer and civil rights groups, including Americans for Financial Reform, the Center for Responsible Lending, and U.S. PIRG.
Public Citizen and Consumer Groups
“The Supreme Court has long held that … tenure protections are constitutional for officers engaged in rulemaking and enforcement in areas where Congress believes that independence and expertise are required.
The panel majority’s opinion radically reinterpreted separation-of-powers principles in concluding that the CFPB’s single-director structure renders the statutory for-cause limitation on the President’s removal authority unconstitutional.”
Click here to view the amicus brief submitted by Public Citizen Litigation Group on behalf of Public Citizen and several consumer organizations.
Members of Congress
“In short, as amici well know, the Bureau’s single-director structure was a considered choice, maintained in the face of vocal opposition during months of debate over the legislation that became Dodd-Frank. Exercising the discretion afforded to it by the Constitution, Congress determined that this structure would best enable the CFPB to ‘keep pace with the changing financial system’ and thus avert another devastating regulatory failure. . . . Congress had every right to make that choice.”
Click here to view the amicus brief submitted by Constitutional Accountability Center on behalf of Members of Congress, including Senator Sherrod Brown (D-OH) and Representative Maxine Walters (D-CA).
Separation of Powers Scholars
“[The] decision rejecting the constitutionality of the Consumer Financial Protection Bureau’s . . .structure is . . .grounded in neither precedent nor the Constitution. The Bureau as constituted enables the President to ensure that the laws are faithfully executed . . .[and] is consistent with governmental structures dating back to the earliest days of the Republic[.]”
Click here to view the amicus brief submitted by Spiegel & McDiarmid LLP on behalf of separation of powers scholars including Peter M. Shane.
Financial Regulation Scholars
“The CFPB represents a constitutionally permissible and effective experiment in agency design. The CFPB has achieved unprecedented relief for consumers—in just six years of operation it has secured nearly $12 billion in relief for approximately 27 million consumers. It has also helped thousands of consumers through its consumer complaint database. The result has been an astounding 97% resolution rate. These results show the value of allowing Congress to adjust independent agency design.”
Click here to view the amicus brief submitted by Gupta Wessler on behalf of financial regulation scholars including Adam Levitin and Michael Barr.