Cadwalader attorneys reviewed the U.S. Court of Appeals for the D.C. Circuit's opinion in PHH Corp. v. Consumer Financial Protection Bureau. In a memorandum titled: "D.C. Circuit Brings CFPB under Presidential Control," the attorneys examine the Court's response to a CFPB interpretation of provisions of the Real Estate Settlement Procedures Act. The Court held that the structure of the Consumer Financial Protection Bureau ("CFPB") was unconstitutional under the Separation of Powers doctrine, due to the fact that its single Director was not subject to the supervision and control of the Executive Branch. Among other insights, the attorneys stated that:
While it is unlikely that the constitutional ruling will affect the CFPB's ability to carry out its regulatory and enforcement agenda, the Court's strong rebuke of the CFPB on the merits [of its RESPA reinterpretation] may make it more difficult for the CFPB to re-interpret prior statutory determinations of other agencies.
The attorneys emphasized that based on the decision, "[t]he CFPB Director faces new accountability to the President, but it remains to be seen whether these checks on the CFPB's authority will materially impact, going forward, the agency's regulatory and enforcement agenda."
Click here to view the Cadwalader memorandum authored by Scott Cammarn, Peter Carey, Martin Horowitz, Joseph Moreno and Jeffrey Robins. Previous Cabinet coverage of the opinion can be found here.
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