WASHINGTON–An appeals court hearing on the constitutionality of the structure of the Consumer Financial Protection Bureau appeared to be divided along partisan lines, according to observers.
An 11-judge panel of the U.S. Court of Appeals for the District of Columbia yesterday heard an appeal of an October, 2016 hearing by a three-judge panel on the same court that the powers of CFPB Director Richard Cordray are unconstitutional because he can only be fired by the president for cause, and not at will. The case was originally brought by PHH Corp. which challenged an action brought against it by the CFPB on constitutional grounds.
Reuters reported that more liberal-leaning judges on the panel “vigorously” questioned Theodore Olson, the attorney representing PHH Corp.
Reuters further reported the arguments featured an unusual about-face, as Justice Department attorney Hashim Mooppan argued against the regulator, as well. That change reflects a Republican administration’s view of the CFPB that has been largely critical.
During the hearing Obama appointee Judge Patricia Millet opined that a single director structure may actually give the president more authority compared with other financial regulators with multiple members of differing political parties, such as the Federal Reserve Board of Governors.
Having an agency headed by one person is "more accountable" to the president, than having an agency with "three or five" members, she said, according to Reuters.