In a story that the Daily Business News has followed closely, mortgage company PHH is taking its battle with the Consumer Financial Protection Bureau (CFPB) to a new level.

According to HousingWire, the company is asking the Court of Appeals for the District of Columbia Circuit to not simply declare the leadership structure of the CFPB unconstitutional.

 

It wants the Court of Appeals to completely kill it.

In a new legal filing in advance of a full court hearing in May, PHH declares its opposition to the continued existence of the CFPB in a new filing, where it says, in part, that “in light of the many constitutional problems that plague the CFPB’s structure, the appropriate remedy is to strike down the CFPB in its entirety.”

While the CFPB had the support of the Obama Administration, the Trump Administration has had the organization in its crosshairs since the election.

Digging into the filing by PHH, it’s clear that the company views the CFPB as dangerous.

 

 

 

 

“In creating the Consumer Financial Protection Bureau, Congress placed massive, unchecked federal power in the hands of a single, unaccountable Director,” said PHH.

“The CFPB is structured so that the Director alone rules over large swaths of the field of consumer finance, subject to virtually no restraints from the representative branches: For example, Congress both strictly limited the President’s ability to remove the Director and surrendered its own power of the purse, allowing the Director to set his own budget and demand funds as he sees fit.

Thus, the Director runs a parallel government unto himself. He need not answer to Congress or the President. That structure cannot be reconciled with the Constitution’s dual promises of democratic government and separated powers.”

PHH makes the argument that the very structure of the CFPB “is unlike any that the Supreme Court has ever condoned, in that the CFPB director serves a five-year term and cannot be removed by the president unless it is for cause.”

PHH also cites that the term of CFPB Director Richard Cordray cannot be cut short if the President wants a replacement and that the term can “be extended indefinitely if the Senate does not confirm a replacement. The result hamstrings, and potentially eliminates altogether, the President’s influence over this powerful agency.”

With this argument, PHH states that the case for shutting down the agency is clear.

“Severance of the CFPB Director’s removal restrictions is not an adequate or appropriate remedy because it would solve only one of the CFPB’s multiple structural problems while creating a new agency structure that Congress likely did not intend,” said PHH.

“Moreover, unless this Court vacates the CFPB’s Order on some other ground without any remand, the separation-of-powers question cannot be avoided: There can be no remand to an unconstitutional agency.”

The CFPB and PHH are due back in court on May 24, 2017 for a full hearing.

The Manufactured Housing Industry Speaks

Daily Business News readers are no strangers to the ongoing saga of the CFPB and the Dodd-Frank Act, with extensive coverage of the impact on the manufactured housing industry.

This information also has indirect ramifications for the Manufactured Housing Institute (MHI), and others in the industry, as the Preserving Access bill is being floated, which would modify portions of Dodd-Frank.

For more on what the Preserving Access bill means for the industry, check out the latest article on The Masthead.

The full filing from PHH is linked here. ##

 

(Image credits are as shown above.)

 

Submitted by RC Williams to the Daily Business News for MHProNews.