CFPB asks full court to rehear constitutionality case

CFPB asks full court to rehear constitutionality case
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The Consumer Financial Protection Bureau (CFPB) filed a petition Friday asking the full panel of the D.C. Circuit Court of Appeals to review its October ruling that found the agency's structure unconstitutional.

In it’s 132-page request, CFPB called the court’s decision “dramatic and unprecedented."

In the 2-1 ruling, three judges on the court said the structure of the independent agency created by the Dodd-Frank Wall Street reform law was unconstitutional because its director has wide-ranging power with little oversight.

The court found that the arrangement "represents a gross departure from settled historical practice" of having multi-member commissions at independent agencies to keep them in check.

But in its request for a rehearing by the court’s full roster of judges, CFPB questioned how the court could conclude that a multi-member commission would be constitutional.

"The panel’s answer had nothing to do with a lack of presidential accountability," the agency said in court documents.

"The panel opined that 'multi-member commissions or boards … reflect a deep and abiding concern for safeguarding the individual liberty protected by the Constitution.' The panel thus rested its ruling on criteria that lack definition or boundary and have no foundation in Supreme Court precedent or separation-of-powers principles."

Allied Progress, a nonprofit research organization, called CFPB's request Friday an “important first step in the fight to overturn the court’s reckless ruling."

"The plaintiffs in this case have been cheered on from the legal sidelines by the very same Wall Street special interests that instigated and profited from the financial crisis of 2007 and 2008, while millions of Americans were losing their homes and their retirement savings," Allied Progress's executive director Karl Frisch said in statement.

"The Consumer Financial Protection Bureau was created to hold these powerful financial institutions accountable – to make sure we never experience such a crisis ever again," he added.

The lawsuit was brought by PHH Corporation, a New Jersey mortgage lender that decided to challenge the $109 million fine it was issued for allegedly accepting kickbacks from mortgage insurers.

While the D.C. Circuit Court of Appeals did not strike down the agency it should not longer be considered independent.