Home / News / Government / Rehearing Granted for PHH v. CFPB Case
Print This Post Print This Post

Rehearing Granted for PHH v. CFPB Case

A ruling by the U.S. Court of Appeals for the D.C. Circuit on Thursday stated that the full Court will take another look at a ruling that struck down the Consumer Financial Protection Bureau (CFPB). This action sets the stage for a legal fight that carries significant implications for the future of the CFPB in the era of the Trump administration.

In addition to granting the CFPB’s petition, the court also ordered that the three-judge panel’s ruling this past October be vacated and that oral arguments will be heard May 24.

The D.C. Circuit’s decision gives the CFPB another chance to defend itself as Republicans in Congress, push to roll back the agency’s authority.

Sen. Ted Cruz (R-Texas) filed a bill this week to abolish the agency as other Republicans continued their legislative push to turn the CFPB into a bipartisan commission.

According to the National Association of Federal Credit Unions (NAFCU), the CFPB argued against the court’s decision on grounds that it would interfere with Congress’s ability to create independent agencies led by a single director. The CFPB pointed to other independent agencies, including the Social Security Administration, the Federal Housing Finance Agency and Office of Special Counsel, to help make its case.

Republican Jeb Hensarling, chairman of the House Financial Services Committee, said the ruling will not affect his intentions on restructuring the CFPB.

"The court's decision to grant another hearing, while not unexpected, has no bearing on the president's ample authority to remove CFPB Director Cordray from office," he said. "I encourage President Trump to take immediate action to uphold the Constitution by reining in this unconstitutional and out-of-control agency.”

One of the nation’s foremost experts on regulatory reform, Joseph Lynyak III of Dorsey & Whitney, says that today’s ruling “puts the previous statutory determination favorable to PHH on hold.” He also pointed out that since the time frame for submitting briefs in late May, a decision will probably not be issued until late next summer at best.

In the meantime, it seems that CFPB will be allowed to function as originally intended while everyone waits for the outcome of the court’s ruling next summer.

 

 

About Author: Sandra Lane

Sandra Lane has extensive experience covering the default servicing industry. She contributed regularly to DS News' predecessor, REO Magazine, from 2004 to 2006, covering local market trends, the effects of macroeconomic shifts on market conditions, and "big-picture" analyses of industry-driving indicators. But her understanding of the mortgage and real estate business extends even beyond those pre-crisis days. She is a former real estate broker and grew up in what she calls "a real estate family." A journalism graduate of the University of North Texas, she has written articles for various newspapers and trade journals, as well as company communications for several major corporations.
x

Check Also

The Spread of Zombie Properties

While the nationwide rate is still significantly less than in 2014, these areas states hold the highest zombie foreclosure rates.

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.