DOJ, CBA File Amicus Briefs in PHH Case

March 17, 2017

On Friday, March 10, 2017, CBA and other trades, filed an amicus brief in the matter of PHH Corporation v. The Consumer Financial Protection Bureau by the D.C. Circuit Court.  On Thursday, February 16, 2017, the Court granted a rehearing petition, which will be en banc, meaning the full circuit bench will hear the case.  The Court scheduled oral arguments for May 24, 2017, and has provided for a new round of briefings.


In response, CBA’s brief outlines the arguments pertaining to the Court’s initial findings on violations of the Real Estate Settlement Procedures Act (RESPA).  Specifically:


  • The CFPB’s order cannot be reconciled with RESPA, the Bureau’s governing regulations, or longstanding policy guidance;
  • In abruptly departing from the plain language of the statute, the Bureau’s own regulations, and longstanding guidance for industry, the agency’s order exceeded its authority and violated fundamental tenets of administrative law and fair notice; and
  • The Order also raises the troubling specter of further changes without notice, deeply unsettling a market built on predicable legal rules.


On Friday, March 17, 2017, the U.S. Department of Justice also filed an amicus brief in the case.  As expected, the Department argued favorably to PHH on the Court’s 2016 decision concerning the separation of powers, arguing the Dodd-Frank Act’s tenure protections for the CFPB Director are unconstitutional – a sole director can only be dismissed for-cause.   However, the Department contends the for-cause removal provision is severable from the remainder of the statute, thus the Court need not invalidate the CFPB in its entirety.  The Department took no position on RESPA or due process issues presented in the case.


In granting the rehearing, the matter remains unsettled for the near future, leaving the constitutionality of the CFPB in limbo.  A new decision from the Court is not likely until late summer at the earliest, though 4Q 2017 is more likely.