Democrats Seek to Intervene in PHH Case Testing CFPB Powers

By Chris Bruce

Sen. Sherrod Brown (D-Ohio) and Rep. Maxine Waters (D-Calif.) Jan. 26 sought to intervene in the PHH case, citing the election of President Donald Trump and calls by congressional Republicans to remove Consumer Financial Protection Bureau Director Richard Cordray ( PHH Corp. v. Consumer Fin. Prot. Bureau, D.C. Cir., No. 15-cv-01177, motion to intervene 1/26/16 ).

The filing, followed later in the day by a similar motion by other advocates, marks the latest effort by Democrats to defend Cordray and bolster the CFPB in the wake of an October court ruling that said the CFPB's single-director leadership structure violates the U.S. Constitution.

According to Brown and Waters, “indications have been accumulating steadily in recent weeks” that the new administration will try to remove Cordray, or that it will make no effort to defend the CFPB’s status as an independent agency as established by the Dodd-Frank Act.

“Movants now seek to intervene in this litigation because recent events have made it clear that their interests in preserving the leadership structure they voted for may no longer be adequately represented by the new Administration,” they said.

They also said the new administration might not permit an appeal to the U.S. Supreme Court if the CFPB so desires. That’s important because the CFPB can’t petition for Supreme Court review on its own.

The Justice Department, Brown and Waters said, “may refuse to allow the Bureau to seek Supreme Court review of this Court’s panel decision, or of any similar decision issued after en banc rehearing.”

The filing, which came on the heels of a Jan. 23 submission by Democratic state attorneys general in support of the CFPB, also may signal that briefing is winding down. One more filing is expected Jan. 27. That’s the deadline for a response by the original plaintiff in the case, PHH Corp., of Mount Laurel, N.J., to a previous filing by the Justice Department before then-President Obama left office.

In theory, once PHH submits its response, the D.C. Circuit could rule on the CFPB’s petition at virtually any time.

The White House did not immediately respond to a request for comment.

To contact the reporter on this story: Chris Bruce in Washington at cbruce@bna.com

To contact the editor responsible for this story: Michael Ferullo at MFerullo@bna.com

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