January 31, 2018

Court says CFPB's structure is constitutional

Sitting en banc, the U.S. Court of Appeals for the D.C. Circuit has upheld the CFPB's constitutionality in the PHH Corp. lawsuit against the bureau – reversing the court's panel opinion from 2016 regarding the constitutional question.

"While the court upheld the CFPB's structure as constitutional, NAFCU still supports changing the leadership of the bureau from a single director to a five-person commission," said NAFCU President and CEO Dan Berger. "NAFCU was the only financial services trade association to oppose subjecting credit unions to CFPB authority under the Dodd-Frank Act, and our view on that has not changed. We will continue to push for the bureau to exempt credit unions from current and future rulemakings."

Last February, the court granted the bureau's petition for a full court rehearing of the case, after the court's initial ruling in October 2016 found the bureau's structure unconstitutional.

In March, NAFCU and 12 other trade associations filed an amicus brief in support of PHH's underlying challenge to the CFPB's interpretation of the Real Estate Settlement Procedures Act.

NAFCU will continue to monitor the suit for its impact on credit unions.