CFPB Petitions for Rehearing in PHH Case

By Jeff Bater

Nov. 18 — The Consumer Financial Protection Bureau has petitioned for a federal court to reconsider its ruling that said the CFPB’s single-director structure violates the U.S. Constitution ( PHH Corp. v. Cons. Fin. Protection Bureau, D.C. Cir., No. 15-01177, 11/18/16 ).

The Nov. 18 petition for en banc review in the U.S. Court of Appeals for the District of Columbia Circuit challenges an Oct. 11 decision by a three-judge panel of the court. In a 2-1 decision, the panel found the CFPB to be “unconstitutionally structured” because the autonomy vested in Director Richard Cordray—who could only be fired by the president and for cause—was a “gross departure from settled historical practice.”

In its petition for rehearing, the CFPB said the panel’s reasoning about the constitutional basis for removing the director is at odds with Supreme Court precedent.

In addition, the petition said the panel’s decision misinterpreted the Real Estate Settlement Procedures Act (RESPA) “in a manner that so fundamentally defeats the statutory purpose as to warrant rehearing en banc.”

PHH is a New Jersey mortgage company that challenged a $109 million disgorgement order by Cordray in 2015. PHH sought review and the court panel reversed in the Oct. 11 decision.

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To contact the editor responsible for this story: Michael Ferullo at

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