Court questions CFPB’s structure

In a case filed last November, mortgage company PHH Corp. is appealing the Consumer Financial Protection Bureau’s $109 million enforcement ruling that the company took kickbacks in violation of the Real Estate Settlement Procedures Act. The case is pending in the DC Circuit Court of Appeals, with oral arguments scheduled for next Tuesday, April 12. In an order issued yesterday, the court requested the parties be prepared to address at oral argument which other independent agencies have ever had a single director and what would happen if that director could be removed. Specifically, the court's order asks:

What independent agencies now or historically have been headed by a single person? For this purpose, consider an independent agency as an agency whose head is not removable at will but is removable only for cause; and (2) If an independent agency headed by a single person violates Article II as interpreted in Free Enterprise Fund v. PCAOB, 561 U.S. 477 (2010), what would the appropriate remedy be? Would the appropriate remedy be to sever the tenure and for-cause provisions of this statute, see 12 U.S.C. § 5491(c)? Cf. Free Enterprise Fund, 561 U.S. at 508-10. Or is there a more appropriate remedy? And how would the remedy affect the legality of the Director's action in this case?

The Wall Street Journal (subscription required) has this article on the case and the order.

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