Full Appeals Court Will Rehear Case on Constitutionality of CFPB Structure

A U.S. appeals court on Thursday granted a request from the Consumer Financial Protection Bureau to reconsider an October ruling that allows the president to fire the CFPB director at will.

The U.S. Court of Appeals for the D.C. Circuit ruled that it would rehear the October ruling in PHH v. CFPB, which bolstered the long-running campaign by financial groups and Republicans to restructure the agency into a five-member bipartisan commission. The en banc hearing, in front of the full appeals court rather than a three-judge panel, gives the CFPB another chance to make the case that its structure is not unconstitutional.

The agency’s single-director structure has drawn criticism from Republicans and financial industry leaders.

Richard Hunt, president and chief executive of the Consumer Bankers Association, a group pushing for a commission structure, said in a statement that the decision “only creates further uncertainty regarding the constitutionality of the CFPB.” He called for Congress and the Trump administration to “move immediately to address this concern on behalf of consumers.”

Robert Weissman, president of the left-leaning advocacy group Public Citizen, said in a statement that the ruling “gives hope that the earlier flawed decision will be reversed.”

Debate over the CFPB’s scope, authority and structure will likely intensify outside the courtroom. Congressional Republicans are preparing to make changes to the 2010 Dodd-Frank law, which established the CFPB, that would limit the consumer agency’s powers. Democrats have been resistant to those proposals.


Finance Brief: Week in Review & What’s Ahead

California Insurance Commissioner Dave Jones said the state will investigate whether or not Wells Fargo harmed hundreds of thousands of customers by selling them car insurance they didn’t need. The probe follows subpoenas issued by New York state’s banking and insurance regulator to two Wells Fargo units last week.

Finance Brief: Labor Department Seeks 18-Month Delay on Fiduciary Rule

The Labor Department said in a court filing that it was seeking an 18-month delay on the fiduciary rule, which requires financial advisers to act in retirement savers’ best interests. The agency filed the document as part of a lawsuit in the U.S. District Court for the District of Minnesota, in which it said that it was proposing to push the compliance date to July 1, 2019, and loosening some of the rule’s restrictions.

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