BREAKING: Court of Appeals reverses earlier ruling, declares CFPB constitutional

“ It is no surprise that this full appellate court reversed its own findings previously made by a three judge panel of the same appellate court.  No surprise at all given that then senate majority leader Reid and then president Obama packed the court with left leaning judges who support any and all Federal agency rulings – whether constitutional or not.  This case is headed for either review by US Supreme Court or amendment by Congress.  To many constitutional legal experts the structure of the CFPB is clearly unconstitutional.”

Steve Murray

President, REAL Trends Inc.

In a stunning reversal of its previous decision, the full Court of Appeals for the District of Columbia Circuit ruled Wednesday that the Consumer Financial Protection Bureau is constitutionally structured.

The decision reverses the court’s October 2016 decision that declared the CFPB’s leadership structure unconstitutional by a 2-1 vote and vacated a $100 million fine levied by the CFPB against PHH Corp.

“None of the theories advanced by PHH supports its claim that the CFPB is different in kind from the other independent agencies and, in particular, traditional independent financial regulators,” the court’s ruling states.

“The CFPB’s authority is not of such character that removal protection of its Director necessarily interferes with the President’s Article II duty or prerogative,” the ruling continued. “The CFPB is neither distinctive nor novel in any respect that calls its constitutionality into question. Because none of PHH’s challenges is grounded in constitutional precedent or principle, we uphold the agency’s structure.”

The court also ruled that PHH’s challenge, if successful, would have changed the face of government as we know it.

From the court’s ruling (emphasis added by HousingWire):

Wide margins separate the validity of an independent CFPB from any unconstitutional effort to attenuate presidential control over core executive functions. The threat PHH’s challenge poses to the established validity of other independent agencies, meanwhile, is very real. PHH seeks no mere course correction; its theory, uncabined by any principled distinction between this case and Supreme Court precedent sustaining independent agencies, leads much further afield. Ultimately, PHH makes no secret of its wholesale attack on independent agencies—whether collectively or individually led—that, if accepted, would broadly transform modern government.

Because we see no constitutional defect in Congress’s choice to bestow on the CFPB Director protection against removal except for “inefficiency, neglect of duty, or malfeasance in office,” we sustain it.

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