CFPB Given Another Day in Court to Defend Its Constitutionality The Consumer Financial Protection Bureau (CFPB) has a second chance to defend its constitutionality thanks to a recent federal court ruling. According to HousingWire, the U.S. Court of Appeals for the District of Columbia Circuit ruled Feb. 16 that the bureau could re-present its defense of its constitutionality to the full court in May. A panel of three judges from the court had ruled the structure of the bureau was unconstitutional by a vote of 2-1 in October last year. That ruling came from a case in which mortgage lender PHH fought against a $103 million fine the CFPB levied against it back in June 2015 for “illegally referring consumers to mortgage insurers in exchange for kickbacks,” according a HousingWire article. In the process of reviewing the case disputing the fine, the U.S. Court of Appeals for the District of Columbia Circuit found that the leadership structure of the CFPB was unconstitutional. But that decision was not made by the entire court, but instead by just a three-judge panel. The decision Feb. 16 to review the case again was made by the entire court, and the review itself will also be heard by the entire 10-judge court. The core issue regarding the constitutionality of the CFPB revolves around the constitutionality of whether the single- director structure at the CFPB is consistent with the U.S. constitution, and that is one of the issues the court has asked both the CFPB and PHH to address when it re-hears the case in May, according to an American Banker article. That single-director structure played prominently in the PHH decision as CFPB Director Richard Cordray in that case overruled a $6.4 million fine initially levied against PHH by an administrative law judge working for the Securities and Exchange Commission with the $109 million fine in his decision on the case.

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