A former state Deputy Attorney General and now mortgage servicing industry lawyer said Monday the fate of the Consumer Finance Protection Bureau hangs in the balance following a Thursday ruling by the U.S. Court of Appeals for the D.C. Circuit.
The court issued an order as a whole on denying a motion to intervene in the case between the Consumer Financial Protection Bureau (CFPB), leaving the embattled watchdog group to continue its case without outside help.
The court issued a per curiam order, one handed down by the court as a whole and not by one judge, denying the attempt by 17 Democratic attorneys general, led by Connecticut’s Attorney General George Jepsen.
Stephen M. Hladik with the law firm Hladik, Onorato and Federman said one of the reasons the motion may have failed was its timing.
“You don’t see motions to intervene this far along in the appeals process,” Hladik said. “It’s not very common.”
Hladik previously served in the Pennsylvania Office of Attorney General, serving as Deputy Attorney General in charge of the Harrisburg office of the Bureau of Consumer Protection.
He said the state attorneys general are likely anticipating taking on a greater enforcement role in light of the new presidential administration’s plans are for the CFPB.
“There’s an outright fear on the state AGs level as to what the Trump Administration is going to do,” Hladik said. “Knowing that they outright said what they’re going to do with Dodd-Frank, the CFPB hangs in the balance.
“They’re literally saying to the Court of Appeals ‘we don’t believe the Trump administration will adequately represent consumers’ interests on behalf of the government,” Hladik said.
The case in question, PHH Corporation v. Consumer Financial Protection Bureau, saw the court vacate a $103 million fine the bureau imposed on PHH and further ruled that restrictions on the president’s ability to remove the bureau’s director were unconstitutional. The bureau filed a petition for rehearing of the decision before the entire D.C. Circuit, and that petition is currently pending before the court.
The attorneys general argued that they have a vital interest in defending an independent and effective CFPB.
The motion to intervene by the attorneys general was joined by additional motions by Sen. Sherrod Brown (D-Ohio) and Rep. Maxine Waters (D-California), who filed their own motion to intervene on January 26. Brown is the current ranking member of the Senate Banking Committee and Waters is the current ranking member of the House Financial Services Committee.
They argue in the motion that Congress decided on the single-director upon its creation in 2010 so it could effectively fulfill its mandate.