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Trump administration calls the structure of the Consumer Financial Protection Bureau unconstitutional in filing

The Justice Department will not support the Consumer Financial Protection Bureau in a monumental court battle over whether the structure of the federal watchdog is unconstitutional, according to court documents filed Friday.

The department also argued that the president should be able to remove the director of the independent agency at will, a shift that consumer advocates say could threaten the independent nature of the CFPB.

Under the Dodd-Frank Act that created the agency, the director can be removed only for cause - setting a high bar for a president who wants to put new leadership in place. That approach was called into question last fall when the U.S. Court of Appeals for the District of Columbia Circuit ruled in support of PHH, a mortgage lender suing the CFPB to challenge an enforcement action.

In October, a three-judge panel ruled that the agency should be restructured so that the president can have the ability to fire the director at will.

That ruling was vacated in February when the court granted the CFPB's request to rehear the case, this time with the full panel of judges. Oral arguments for the case are scheduled for May 24.

In Friday's amicus brief, the Justice Department compared the regulator to other independent agencies that are run by a commission with multiple members and concluded that the design of the CFPB may violate the Constitution because it is run by a single director that the president cannot remove at will. "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 brief reads.

The CFPB declined to comment. The agency has until March 31 to file another brief in the case.

Read more at THE WASHINGTON POST

USA TODAY: Trump administration joins legal challenge to remove CFPB director

The Trump administration Friday officially joined a legal challenge aimed at sharply reducing the authority of a federal consumer watchdog that has drawn praise and criticism for cracking down on mortgage abuses, banking irregularities, and other alleged financial wrongdoing.

Intervening in a federal appeals court case, the Department of Justice argued in an amicus brief that the structure of the Consumer Financial Protection Bureau (CFPB), the watchdog created after the financial crisis during the Obama administration, is unconstitutional.

The action is unusual, because the challenge focuses on the makeup and leadership of an agency that's part of the federal government Trump now heads. But the court's decision could drastically affect Trump's policy goals to roll back financial regulations and defang the agency.

In October, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit agreed with PHH Corp., a New Jersey-based mortgage company, that the leadership structure of the CFPB is unconstitutional and vacated a $103 million fine that the CFPB levied on PHH.

The court's full bench is reviewing the decision, with a hearing scheduled for May 24.

The CFPB, created as part of the Dodd-Frank Act in 2010, is funded by the Federal Reserve and is led by a single director who is appointed by the president for a term of five years. The term of the current director, Richard Cordray, doesn't expire until 2018. But Trump has been open about his desire to replace him with someone who would presumably be more favorable to the president's policy.

Read more at USA TODAY

New Mexico Lawmakers OK Watered-Down Payday Loan Reform Bill

SANTA FE, N.M. (AP) - New Mexico lawmakers have passed a proposal capping the amount of interest and fees charged by the payday loan industry in one of the nation's poorest states.

The House voted earlier Saturday to set new limits on small loans, including a 175 percent cap on interest rates in New Mexico.

The Senate vote late Friday came after an emotional debate by conflicted senators who live in poor districts and who wanted rates capped at 36 percent.

Sen. Clemente Sanchez, a Grants Democrat and the bill's sponsor, said the debate over payday loans wasn't over, but his proposal was a start.

However, Sen. Craig Brandt, a Rio Rancho Republican, said limiting payday loans interest rates was "limiting freedom."

The amended bill heads back to the House for final approval. ASSOCIATED PRESS

Trump Administration Says Makeup of CFPB is Unconstitutional

The Trump Administration is asking a federal court to rule that the president has the power to fire the director of the CFPB, reversing a position that was taken by President Obama.

The President's executive power includes the authority to remove officials in the Executive Branch, the Department of Justice said in its brief, filed Friday in a suit challenging the constitutionality of the makeup of the CFPB.

Given his dislike of the CFPB and its director, Richard Cordray, Trump likely would fire him if he could.

In the suit, filed by PHH, a mortgage company, a panel of the U.S. Circuit Court of Appeals for the District of Columbia ruled that the structure of the CFPB is unconstitutional because it is governed by a single director who can only be removed for cause. The panel said that the president should be able to fire the director for any reason.

However, the appeals court granted a request by the agency to have the entire appellate court consider the ruling.

The CFPB has argued that its makeup is constitutional and that position is supported by several Democratic state attorneys general.

Several Republican attorneys general have argued that the agency's makeup is unconstitutional.

In its brief, the Trump Administration states that if the makeup of the CFPB is ruled unconstitutional, the remainder of Dodd-Frank will be "fully operative." The administration said the CFPB differs from other regulatory commissions whose members may be more insulated from being fired since they serve staggering terms.

The administration said that because a single agency head is unchecked by the group-decision-making found in other agencies, there is a greater risk that a single person will engage in extreme departures from the president's executive policy. CREDIT UNION TIMES

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DOJ Enters the Fray...Against the CFPB

There's another installment in the ongoing saga of PHH v. CFPB, the legal case challenging the constitutionality of the newest federal agency, the Consumer Financial Protection Bureau. And this installment is a weird one. The Department of Justice has now joined in, filing a brief...against the CFPB. Yes, the federal government is now effectively on opposing sides of this case.

If you haven't been following the story, I have a few posts that can bring you up to speed. At this point, a panel of judges has ruled against the CFPB, and a majority of them found that the CFPB's structure is unconstitutional. (I find it difficult to see how anyone could find otherwise.) Part of the problem with the agency's structure, as the court found, is that it has a single head who is removable only for cause. The director is not accountable to any elected official. To cure this problem, the court decided that the director should be removable by the president at will. This would make the agency more like a traditional executive agency-like the Department of Justice, for example-and less like existing independent agencies. Although it is important to note that even most independent agencies, like the Securities and Exchange Commission, are headed by a multi-member board and the chair of that board serves as chair at the will of the president.

Now the federal appeals court in D.C. is rehearing the case en banc. That means that all 11 of the active judges on the court will hear the case and issue an opinion together. On Friday, the DOJ filed a friend of the court brief in support of PHH.

While it is extremely rare (although not unheard of) for one part of the government to file a brief in opposition to another part, it is not entirely surprising in this case. In ruling against the CFPB in the earlier hearing, the court handed the president a new bit of power. One of the reasons that our government has three co-equal branches is to allow them to serve as checks on one another. As Judge Kavanaugh noted in his opinion for the panel in the original hearing, quoting Justice Scalia "The purpose of the separation and equilibrium of powers in general, and of the unitary Executive in particular, was not merely to assure effective government but to preserve individual freedom." Arguably, the government filing on both sides of a case is a sign the system is working as planned. Read more at the CATO INSTITUTE

Why Trump wants power to remove director of Consumer Financial Protection Bureau

On Friday, the DOJ joined a legal challenge to the CFPB, the government's consumer watchdog for financial affairs. Declaring the CFPB's structure unconstitutional, as the lawsuit seeks to do, might support the Trump administration's deregulation efforts.

MARCH 18, 2017 -In an unusual move, the Trump administration has signed on to a legal challenge against one of the government's own agencies.

On Friday, the Department of Justice (DOJ) filed an amicus brief in an appeal of a case involving the Consumer Financial Protection Bureau (CFPB), a consumer watchdog, and the PHH Corp. mortgage company. In its brief, the DOJ sided with a three-judge panel that had originally described the CFPB's structure unconstitutional, saying it gave the bureau's director too much power.

"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 wrote in the brief, according to The Wall Street Journal.

If the full court decides to uphold the verdict of the three-member panel, the president would be able to fire the bureau head at will, something he currently cannot do. This would likely benefit President Trump, who has expressed a desire to replace current director Richard Cordray with someone who might be more business-friendly. But the bureau's independence is seen as a positive by many Democrats, who say it has helped consumers. It's unclear how the court will rule.

The CFPB was created in 2010 as part of the Dodd-Frank Act. In the aftermath of the financial crash, it was seen as a way to tighten regulation, prosecute irregularities and make banks more oriented toward the needs of consumers. Read more at SCIENCE CHRISTIAN MONITOR

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